RBI Expected to Cut Rates to Stimulate Growth

The Reserve Bank of India (RBI) is anticipated to reduce key interest rates by up to 25 basis points this week, a move supported by lower inflation and aimed at fostering economic growth amidst global uncertainties, including new US tariffs.

Global and Domestic Factors at Play

Madan Sabnavis, Chief Economist at Bank of Baroda, emphasizes the importance of the upcoming policy announcement, considering global economic uncertainties and the potential impact of US tariffs on India's growth and currency.

Opportunities and Challenges for India

The imposition of tariffs by the US presents both challenges and opportunities for India, potentially benefiting Indian exports by making goods from competing countries more expensive globally.

Industry Calls for Caution

Assocham recommends a "wait-and-watch" approach, suggesting that recent RBI liquidity measures should first be allowed to take effect before considering further rate cuts.

Impact on Housing and Consumption

A potential rate cut could boost consumption and stimulate demand in the housing market, though the effectiveness depends on how quickly commercial banks pass on the changes to consumers.