RBI's decision to ease the policy rate is timely, sets stage for further rate cuts over near term

The Federation of Indian Chambers of Commerce and Industry (FICCI), stated in a latest update that the Union Budget 2025-26 announced last week has laid a strong foundation for investment-led growth with an emphasis on manufacturing, MSMEs and infrastructure. Todays rate cut complements these measures, lending further support to Indias growth outlook. FICCI is confident that the combined impact of a pro-growth budget and a supportive monetary policy will help strengthen Indias growth trajectory, support consumption, and drive long-term investments, Harsha Vardhan Agarwal, FICCI President, noted. RBIs decision to ease the policy rate is a timely and forward-looking step and we hope that the banking sector would follow through on this cue and a lowering of lending rates will be seen. Further, while RBI has maintained a neutral stance with regard to Monetary Policy, the indication towards a more flexible interpretation of inflation targeting sets the stage for further rate cuts over the near term, Agarwal added.

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