BENGALURU - The Reserve Bank of India (RBI) on Friday cut interest rates for a fifth straight meeting, stepping up efforts to kickstart economic growth languishing at six-year lows.
The six-member monetary policy committee (MPC) cut the repo rate by 25 basis points to 5.15%, in line with expectations. The reverse repo rate was reduced to 4.9%.
GARIMA KAPOOR, ECONOMIST AND VICE-PRESIDENT, ELARA CAPITAL, MUMBAI
"While lower lending rates are welcome, they alone may not be able to turn around the sentiment in the economy. It would need to be accompanied by spending from the government."
"The current sluggish growth dynamics and benign outlook on inflation suggest that the MPC would have more room to cut rates."
"By November-end, data is likely to indicate that GDP growth in Q2 hasn't improved much from Q1 levels basis the high frequency data. We expect terminal repo rate to be 4.75% in this easing cycle."
"With the linking of floating lending rate to external benchmark, the transmission of rate cuts from here will be immediate. Moreover, with RBI maintaining surplus liquidity and continuing to guide for an accommodative stance, we believe the transmission is only likely to improve from here."
K. JOSEPH THOMAS, HEAD RESEARCH, EMKAY WEALTH MANAGEMENT, MUMBAI
"The RBI has once again proved to be well ahead of the curve in unleashing monetary efficacies to combat the economic slowdown... with the cut of 25 bps (and) bringing down the repo rate to 5.15%."
"In conformity with this aggressive approach, the RBI is likely to continue with its campaign for more rapid transmission of the benefits to credit users, through lower rates to a large extent linked to the base rate. There may be further cuts in the rate in light of the GDP growth forecast being lowered form 6.90% to 6.10% for FY20. We need to see more action from the government for a consumption-led recovery."