RBI has started what’s likely to be a modest rate reduction cycle. Household borrowing may be cheaper, but not before a year. Most other predictions make little sense given global uncertainty
The policy rate hadn’t moved in 24 months, nor was there a rate cut in 57 months. After that long lag, yesterday, RBI, under its new governor, Sanjay Malhotra, sliced 25 basis points (bps) off the repo rate, as expected, following a gradual decline in inflation amid lower-than-expected economic growth.