By: Mr Ashok Mittal, Director, FynX Capital

As expected, the RBI has reduced the repo rate by 25 BPS to 6.25%, a neutral yet growth-focused move aligning with expectations. This decision balances inflation control with economic expansion, ensuring greater liquidity in the financial system and making credit more accessible for MSMEs and key industries.

With GDP growth projected at 6.7% for FY26, as anticipated by us, we foresee 2-3 more rate cuts, further strengthening economic momentum. Additionally, the RBI’s flexible inflation targeting is a strategic step toward long-term financial stability.