Views on RBI Monetary Policy by Dr. Samantak Das, Chief Economist and Head – Research and REIS, India, JLL
Below the Views on RBI Monetary Policy by Dr. Samantak Das, Chief Economist and Head – Research and REIS, India, JLL
The Reserve Bank of India has surprised markets with a significant 50 bps reduction in the repo rate - the largest cut we've seen in recent years. This decisive action for the third consecutive time shows the RBI's flexibility and responsiveness to changing economic conditions both within India and internationally. This substantial rate cut does more than just lower borrowing costs. It sends a clear message that the RBI is fully committed to supporting economic growth. We believe this move will boost market confidence and start a positive chain reaction - cheaper capital will encourage businesses to make more productive investments and stimulate demand across various sectors, including those that haven't traditionally led economic growth. By changing the stance to neutral, the RBI is helping shield India's economy from ongoing global challenges while enhancing the country's appeal to international investors. This is especially important now, as companies worldwide are reevaluating their supply chains and considering where to direct their investments.
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