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Below the Quote on RBI MPC Reaction by Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd

“The MPC decided to vote in favour of growth despite ongoing robust growth in the economy. The unanimous nature of the decision in cutting rates by 25 bp reflects the consensus in the MPC that giving further boost to growth is a risk worth taking even in the context of depreciating rupee. 

The projection of 7.3% GDP growth for FY 26 is positive for the market. Banks will like the policy decision overall but are unlikely to respond very positively to the rate cut since their NIMs will come under pressure and they will face difficulties in mobilising deposits if deposit rates are lowered. 

However, rate sensitives like autos and real estate stand to gain from the rate cut.”

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