IGI Logo

This move will be positive for the borrowers who have taken loans at floating interest rates as the banks will pass on the benefit of the rate cut to the borrowers. Also, auto loans, home loans, and personal loans are expected to see higher demand. The rate-sensitive sectors such as banking, consumer durables, real estate, and automobiles will benefit from this announcement as it can boost borrowing, spending, and investment. This can result in higher corporate earnings, and business expansion, foster job creation, and promote holistic economic growth.

PMI Manufacturing Future Output Index rose to 65.1 in January 2025 from 62.5 in December 2024 signifying a robust manufacturing sector. India’s CAD (Current Account Deficit) fell slightly to 1.2% of the GDP in Q2 of FY25 from 1.3% in Q2 of FY24 which might reduce the pressure on the rupee. Also, India’s forex reserves stand at $630.6 billion (as on January 31, 2025), providing great support to India’s external sector amidst global uncertainties.