Quote on RBI MPC from Mr V P Nandakumar MD & Chairman, Manappuram Finance LTD
Below the Quote on RBI MPC from Mr V P Nandakumar MD & Chairman, Manappuram Finance LTD
"The RBI’s 25-basis-point rate cut, which brings the repo rate down to 5.25%, comes at a time when inflation is easing and the broader economy needs a little more support. With price pressures gradually stabilising and liquidity improving, the move aims to lift consumption and investment at a moment when the growth momentum has moderated. Lower policy rates usually work their way into borrowing costs across home loans, autos, MSME credit and working-capital financing, helping households and small businesses manage their cash flows more comfortably, even though the full transmission will take a few weeks.
The introduction of the three-year rupee-dollar sell swap adds another layer of support. By infusing longer-term liquidity without unsettling short-term rates, the RBI is ensuring that banks have the room to lend more comfortably. This should help lower funding costs further and improve liquidity conditions for both consumers and small businesses.
From a wider economic standpoint, the cut strengthens the pro-growth environment. Bond yields typically soften, credit demand tends to improve and sectors that rely heavily on financing—such as real estate, autos and NBFCs—benefit from lower EMIs and better borrowing conditions. Savers may see deposit rates adjust downward, but that is part of the broader cycle as the financial system aligns with lower benchmark rates.
Overall, the RBI’s decision is a measured and timely step. With inflation trending toward the comfort zone and certain parts of the economy still operating below capacity, this rate cut helps reinforce confidence and supports a steady, broad-based recovery as the country moves into FY27."
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