RBI cuts repo rate by 25 bps to 5.75%; changes stance to 'accommodative'

Internal working group to review liquidity management framework

The Reserve Bank of India (RBI) on Thursday cut the policy rate by 25 basis points (bps), as widely expected, and changed its stance to ‘accommodative’, which Governor Shaktikanta Das said meant rate hikes were off the table. Economists, however, see this as a sign of more rate cuts to come.

The rate cut was to “accommodate growth concerns by supporting efforts to boost aggregate demand and, in particular, reinvigorate private investment activity” while remaining consistent with the flexible inflation targeting mandate of the six-member Monetary Policy Committee (MPC), the policy statement said. Weakening growth impulses and a “sharp slowdown”