RBI keeps options open for more rate cuts with move to accommodative stance

The policy also has several developmental and regulatory measures

The RBI’s decision to cut rates and move to accommodative mode was perhaps a manifestation of middle ground of delivering rate cut and keeping the ammunition ready for more. 

Global economic growth has lost pace after Q12019. Loss is growth is fairly widespread across both advanced and emerging economies. Weak global demand due to escalation in trade wars may further impact India’s exports and investment activity. Thus, a rate cut at this juncture was warranted. 

Even as the RBI cut its repo rate, the dogma of rate transmission continues to characterise the financial system and lending rates can only decline if banks