50 Bps Cut In Repo Rate, 100 Bps Cut In CRR! RBI Shifts Gears To Accelerate Growth

Here’s the full speech by Reserve Bank of India (RBI) Governor Sanjay Malhotra. Not only has the RBI slashed Repo Rate for the third consecutive time, it done so by an unexpected 50 bps – bringing rates to near 3-year low of 5.50% from a high of 6.50%. The RBI has also announced a cut in the Cash Reserve Ratio (CRR) by 100 bps. This cut, however, plays out by November 29 in 4 equal tranches and will release ₹2.5 lakh crore in the banking system. While loans are expected to be cheaper, rates will also fall on Fixed Deposits – not only due to the Repo Rate cut, but also due the huge infusion of liquidity in the system. The Governor, in his speech, also announces a shift in the monetary policy stance to ‘Neutral’ from ‘Accommodative’ to ensure a focus on economic growth. While the economic growth forecast for FY26 has been retained at 6.5%, RBI has lowered its inflation estimate for the year to 3.7% from 4% earlier.