Usually, the bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india, while making a decision on the interest rate for loans, mainly considers the country's retail inflation situation. Retail inflation has been declining for the last few months. In particular, India's retail inflation has fallen to a 6-year low of 3.16 percent in April. With the decline in inflation in April, retail inflation has remained below the Reserve Bank's medium-term retail inflation target of 4 percent for the third consecutive month. Retail inflation is below the RBI's target and is expected to remain under control in the coming period, so experts said that there is a high possibility that the bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india will reduce the key lending rate to stimulate the economy. In this situation, Morgan Stanley has said that the bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india is likely to take a drastic interest rate cut due to factors such as low inflation and low growth. In a statement issued by the company in this regard, we expect the bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india to implement a drastic interest rate cut cycle considering the slow growth while inflation is under control.
Repo Rate:
We expect the bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india to reduce the key lending rate (repo rate) by a total of 1 percentage point to 5.5 percent. If the global economy slows more than expected or inflation in india moderates rapidly, the RBI could extend its rate-cutting cycle beyond what is currently planned. Along with cutting interest rates, the RBI is expected to use other tools to stimulate economic growth. These include measures to ensure adequate liquidity in the financial system and easing regulations to boost credit growth.

On the fiscal policy front, the government is expected to continue on the planned path of fiscal consolidation, as outlined in the Union Budget. The focus will be on increasing capital expenditure to stimulate growth. While monetary policy will continue to support the economy, it may not fully offset the impact of slower growth. The Reserve Bank's efforts will act as a safeguard when domestic economic concerns increase. The Reserve bank is expected to be flexible in taking additional measures, including maintaining adequate liquidity and supporting credit growth through large-scale prudent easing, depending on economic needs.
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Sowmiya Sriram

22/05/2025 06:03 PM