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RBI’s 25 bps rate cut draws positive response from market participants
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....BI’s 25 bps rate cut draws positive response from market participants<BR>FEMA / RBI<BR>Dated:- 5-12-2025<BR>PTI<BR>Kolkata, Dec 5 (PTI) The RBI's decision to cut repo rate by 25 basis points drew a positive response from market participants, with the move set to support growth, improve liquidity conditions and help ease pressure on yields. Announcing the fifth bi-monthly monetary policy for the....
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.... current fiscal, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) has unanimously decided to cut the short-term lending rate or repo rate by 25 basis points to 5.25 per cent with a neutral stance. Edelweiss Life Insurance Chief Investment Officer Ritesh Taksali said the policy “has firmly supported growth” as inflation has cooled and is expected to remain benign over the ....
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....next year. He noted that liquidity infusion through open market operations and FX (forex) swaps was necessary as dollar outflows and currency defence had tightened system liquidity. The RBI on Friday decided to conduct Open Market Operation (OMO) purchases of government securities of Rs 1 lakh crore this month in a bid to maintain sufficient liquidity in the system. “RBI's dovish pivot is req....
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....uired to support yields, which have remained under pressure. Structurally, with a rare goldilocks scenario cited by the governor, we could expect stable macroeconomic conditions,” Taksali said. 'Dovish policy' aims at boosting growth with lower rates and expanded liquidity. Commenting on the rate-cut announcement, IndiaBonds.com Co-Founder Vishal Goenka said the 25-bps cut was "timely" given r....
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....ecent inflation prints and the lack of transmission of lower rates in the banking system. “Forward expectations of inflation have come much lower, opening the door for another rate cut if required before the end of the financial year,” he said. Goenka added that "cheaper funding would aid governments and corporates, while the Rs 1 lakh crore OMO purchase plan should boost liquidity and flatt....
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....en the yield curve". He said the policy backdrop makes it an opportunity to lock in current corporate bond rates in the 2–3 year segment and to consider long-end government bonds for potential gains. Axis Securities PMS Chief Investment Officer Naveen Kulkarni said the rate cut was widely expected, with the RBI maintaining a neutral stance while lowering its inflation forecast for FY'26 to 2 p....
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....er cent and raising its growth forecast to 7.3 per cent. “For banks, the impact on NIMs (net interest margin) should remain manageable, similar to trends seen during the 100 bps reduction between February and June 2025,” he said. Kulkarni said credit growth momentum is reviving, supported by consumption demand, while asset quality concerns, particularly in the unsecured segment, are easing. ....
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.... “Despite the rate cut, we believe the earnings-downgrade cycle is now behind us and expect earnings growth to improve from here on,” he added. The rate cut is expected to make advances, including housing, auto and commercial loans cheaper. Kolkata-based Merlin Group Managing Director Saket Mohta said the reduction in borrowing costs will directly ease the burden on homebuyers. “The repo ....
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....rate cut is a welcome move for the real estate sector in Kolkata as we close 2025. It will further reduce EMIs and trigger an uptick in residential sales. Affordable and mid-income housing, which are highly sensitive to interest fluctuations, will benefit the most,” he said. Mohta added that the rate cut is also likely to have a positive impact on Kolkata’s "growing" premium housing market. ....
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....Property consulting firm Anarock Group Chairman Anuj Puri said the latest rate cut reinforces the positive sentiment created by earlier easing cycles this year. “This move further sweetens the value proposition for homebuyers, especially in the affordable and mid-income segments,” he said. He noted that average housing prices across the top seven cities rose by around 10 per cent in 2025, af....
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....fecting affordability. “This rate cut provides a critical cushion and can bring home loan interest rates to more attractive levels. Many buyers, who deferred purchases due to price hikes, may now take the plunge. It’s a distinct sentiment multiplier for year-end sales,” Puri said. The impact will depend on how swiftly banks transmit the rate cut, he said. If lending rates are reduced quic....
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....kly, he expects sales momentum to carry into the first quarter of 2026, with luxury housing likely to continue driving the market. “Demand for affordable and mid-segment homes remains strong, but high prices have constrained affordability. This rate cut can bring some fence-sitters back into the market,” he added. Purti Realty MD Mahesh Agarwal said rate cuts, low inflation and a stronger ec....
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....onomy have “created one of the most favourable phases for homebuyers in years”, with lower EMIs and improved affordability set to drive broad-based real-estate growth. PTI BSM BDC<BR> News - Press release - PIB....