RBI policy: More rate cuts likely ahead as MPC prefers growth to inflation

The MPC has also brought down the projection of GDP growth of 6.9 per cent from 7 per cent, which is not significant but definitely does affect sentiment

The credit policy this time is unique as for the first time there is a 35 basis point (bps) cut in the repo rate. This is a kind of compromise between the expected 25 bps cut and the more aggressive 50 bps which the market wanted. This has not had an immediate impact on G-Sec yields with the 10-year bond still at 6.31-6.33. The hope is that the transmission is faster to the lending rates, which would soften and help industry grow.

The previous rate cuts of 75 bps with accommodative stance have not quite worked to push up investment, and