India's Q2FY25 growth slowed to 5.4%, below RBI's 7% projection, with analysts linking it to the MPC's cautious stance on rate cuts
The MPC kept the policy rate at 6.5%, prioritising disinflation and price stability, with experts backing the decision against a knee-jerk rate cut
RBI cut the cash reserve ratio by 50 bps to ease liquidity stress, though other tools could address short-term liquidity needs effectively
Inflation may fall to 4% by Q2FY26, allowing gradual rate cuts, though RBI sees limited scope due to a higher neutral rate
RBI cut FY25 growth forecast to 6.6%, expects 7%+ in coming quarters, though analysts warn projections may be overly optimistic
Policy-rate cuts may not ensure sustainable growth; the government must find alternative drivers, while managing the rupee's overvaluation carefully