25bps rate cut will help sustain economic momentum
A 25 bps rate cut is expected to support economic momentum by boosting liquidity, encouraging borrowing, and aiding overall growth.
25bps rate cut will help sustain economic momentum
Mumbai, Dec 05
The RBI delivered the widely anticipated 25 bps repo rate cut to 5.25%, reinforcing India’s current ‘Goldilocks’ phase of strong growth and benign inflation. The MPC’s decision to retain a ‘Neutral’ stance is strategic—it provides immediate support to domestic credit conditions while preserving flexibility amid an uncertain global backdrop.
Ajit Mishra – SVP, Research, Religare Broking says, “This approach helps sustain economic momentum today, yet keeps the central bank well-positioned to respond swiftly to any emerging risks.”
A Dovish cut: The RBI MPC has effectively juggled the growth, inflation, currency mix with a bold 25bps cut along with clear enunciation of durable liquidity provision over the coming quarters.
Shriram Ramanathan, CIO, Fixed Income, HSBC Mutual Fund says, “Albeit data dependent, we believe the growth-inflation outlook continues to provide space for one more cut in Q1 2026.”
The bond markets cheered the announcement of OMO purchases of INR 1 lakh cr in December, and we expect another INR 1.5 lakh cr of OMO in the Jan-Mar quarter, which should provide a favorable technical backdrop for softer bond yields and comfortable liquidity.
