RBI sends clear signals to boost economic growth, say experts on rate cut

New Delhi: The Reserve Bank of India’s 25-basis-point rate cut and its commitment to inject Rs 1 lakh crore of liquidity have been welcomed by industry leaders and economists, who said the measures send a strong signal that policy tools are being actively deployed to support growth amid global uncertainty and high US tariffs.

Home, auto and other retail loans are expected to become cheaper as the RBI lowered the repo rate to 5.25 per cent, while maintaining its neutral stance. Ficci President Anant Goenka said the calibrated easing will stimulate credit offtake and reinforce growth momentum.

“Today’s monetary policy sends a clear and reassuring signal that policy instruments are being actively deployed to safeguard India’s growth trajectory and support economic expansion amid a challenging global environment,” Goenka said.

Assocham President Nirmal Minda said the cumulative 125-bps reduction this year will spur industrial expansion and job creation. Lower funding costs are expected to pull down lending rates such as MCLR, reduce EMIs and boost consumption across sectors.

Experts said the move reflects the Monetary Policy Committee’s confidence that the economy is not overheating. Mandar Pitale of SBM Bank (India) noted that MPC members appear more concerned about weakening lead indicators that could drag growth if left unaddressed. Exporters’ body FIEO President S C Ralhan said cheaper credit will help exporters invest in working capital and technology amid volatile global demand.

The real-estate sector expects a direct boost. ArisUnitern’s Navin Dhanuka said improved affordability will lift homebuyer confidence, while BLS E-Services Chairman Shikhar Aggarwal said lower rates will bring relief to buyers.

Jaypee Infratech’s Jash Panchamia said cautious mid-segment and affordable-housing buyers are likely to move ahead with purchases.

Startups and MSMEs should also benefit, said Aikyam Capital’s Anand Mody, as lower borrowing costs ease working-capital pressure.

Biz2X CEO Rohit Arora said the combination of lower rates and durable liquidity—via OMO purchases and a USD 5 billion FX swap—could ensure more predictable credit for MSMEs.

Economists highlighted broader macro benefits. PwC’s Ranen Banerjee said addressing rupee volatility through liquidity tools will stabilise markets, while a higher Q4 FY26 inflation projection improves nominal GDP and fiscal space.

“The RBI has utilized the available monetary space (with forward CPI estimates anchored around 4 per cent) to ensure that the system receives adequate support for sustained growth. The conditions necessary for effective transmission have also been addressed through the announcement of durable liquidity measures, including OMOs and FX swaps. Going forward, while the guidance suggests some space, the focus would likely shift more toward liquidity management and policy transmission. Overall, the policy measures have appropriately responded to the domestic growth–inflation matrix rather than being tied up with concerns over INR movements that are a logical adjustment to capital flows and tariff concerns in the short term, Rajeev Radhakrishnan, CFA, CIO – Fixed Income, SBI Mutual Fund said.