RBI's rate cut by 25 basis points, keeps CRR unchanged - TradingBells

Mr. Amit Gupta, Co - Founder and CEO, TradingBells

The RBI has cut the repo rate by 25bps to 6% as expected in the monetary policy meeting today. This was the first policy review of the new fiscal, and the final one before the general elections. The markets were expecting a rate cut of 25bps, and hence we do not expect any short term volatility in the domestic stock markets.

A rate cut would help in boosting borrowing and consumption which would help in countering receding inflation and boost the Industrial Production. GDP growth rate has slowed to 6.6% in the Oct-Dec 2018 period and since the inflation is well within RBIs target range, a 25bps rate reduction should help in improving both these indicators at the same time.

Source : Equity Bulls

Keywords