BENGALURU - The Reserve Bank of India cut its policy interest rate by 25 basis points in a widely expected move on Thursday, while also changing its monetary policy stance to "accommodative" after the economy grew at its slowest pace in over four years in the January-March quarter.
The six-member monetary policy committee (MPC) cut the repo rate to 5.75% as predicted by 44 of 66 analysts polled by Reuters last week. The reverse repo rate was reduced to 5.50%.
RUPA REGE NITSURE, CHIEF ECONOMIST, L&T FINANCIAL HOLDINGS, MUMBAI
"Today's policy actions are perfect and give a clear signal that the RBI will continue with easy monetary conditions until it sees a definite improvement in growth-inflation mix."
"Going by the macro undercurrents, the rate-cutting cycle will continue in the coming quarters as well."
"Recent GDP numbers were consistent with the slowdown predicted by high frequency leading indicators and the RBI has taken a serious note of it."
"The government too will address growth concerns in its upcoming full Budget in July and there are pleasant signs that both the government and the RBI will work in tandem to pull the economy out of the trap."
"Transmission will happen meaningfully if the banking system witnesses surplus liquidity conditions for a sizeable period and if the RBI undertakes confidence boosting measures for the NBFC sector."