RBI's bold 50 bps rate cut sparks market buzz: Here's what they say

In a surprise move, the Reserve Bank of India slashed the repo rate by 50 basis points to 5.5 per cent and reduced the Cash Reserve Ratio (CRR) by 100 basis points in a staggered manner.

The central bank also shifted its policy stance from 'accommodative' to 'neutral'.

Here's what economists, strategists, and leaders from the banking and finance industry had to say:

"RBI’s bold move: what next after it cuts by 50bp?": Deepali Bhargava, Regional Head of Research, Asia-Pacific, ING
"The RBI cut policy rates by more than expected and changed its policy stance from accommodative to neutral. We think that with this move, the RBI is signalling a near-term pause, while leaving the door open for more easing if growth or inflation weakens further. We continue to expect another 25bp rate cut in the fourth quarter of this year."

"Neutral stance suggests fewer rate cuts ahead": Jeff Ng, Head of Asia Macro Strategy, Sumitomo Mitsui Banking Corporation
"RBI may have decided to move quickly to a more appropriate policy rate level after recent headwinds and low inflation prints. A shift toward neutral stance means more rate cuts may be unlikely in the near-term."

"MPC delivered major surprises with repo, CRR cuts": Siddhartha Sanyal, Chief Economist & Head of Research at Bandhan Bank

"Today’s monetary policy committee (MPC) meeting sprang several major surprises. The 50-basis point repo rate cut came in as a surprise against consensus and our expectation of a 25bp rate cut. However, given the change in stance of monetary policy from “accommodative” to “neutral” and the RBI’s communication of very little space for more support from monetary policy, our expectation of a terminal repo rate of 5.50% in the current cycle remains largely unchanged.

The larger than expected rate cut, coupled with announcement of a large CRR cut around the beginning of the busy season, brings in more focus on transmission of the monetary policy actions into the real economy. Today’s announcement will not only push banks’ external benchmark linked lending rates lower, but will also lower MCLR and deposit rates, thereby, bringing in greater pace and intensity to transmission."

"Action-packed policy, out-of-the-box thinking": C.S. Setty, Chairman at SBI & Chairman at IBA

"A 50-bps policy rate cut, a staggered 100 bps CRR cut and change of stance to neutral, RBI today's monetary policy communication was action packed - innovative, out of the box and an unanticipated surprise. The MPC has broadly addressed any concerns on slowdown in growth on account of global uncertainties and fully capitalized on the softening domestic inflation to deliver a frontloaded rate cut, staggered durable liquidity injection yet conserving the space for future action.

The policy is definitely positive for all sectors of the economy, particularly for banking and finance. In particular lower cost of borrowing will act as a counterbalance to any uncertainty."

“Very dovish policy, capex boost expected”: Sagar Shah, Head – Domestic Markets, RBL Bank
"Very dovish policy frontloading the Repo cut and liquidity infusion. Reduced cost of capital will lay groundwork for capex with a lag of 2 quarters. CRR cut along with Repo cut should lead to transmission faster."

"RBI wants banks to act fast": Venkatakrishnan Srinivasan, Managing Partner, Rockfort Fincap

"The RBI has front-loaded everything and wants banks to react now. By changing the stance, I think they are trying to indicate no immediate rate cuts."

"Transmission now rests with banks": Madhavi Arora, Economist, Emkay Global Financial Services Ltd.
"The ball is in the banks’ court to transmit easier financial conditions faster."

"RBI’s intent is growth support amid uncertainty": Amit Bivalkar, Founder Director, Sapient Finserv

"The RBI’s decision to cut the repo rate by a sharper-than-expected 50 basis points to 5.5% reflects its strong intent to support economic growth amid rising global uncertainties and weak domestic demand. The cumulative 100 bps cut since February 2025, along with the phased 1% CRR reduction, will ease borrowing costs and improve liquidity in the system, potentially boosting credit flow. However, with the shift in stance from ‘accommodative’ to ‘neutral’, the central bank has signaled a pause, choosing to closely monitor inflation trends and global developments before taking further action."

"CRR cut to release ₹2.5 lakh crore liquidity": Dr. Manoranjan Sharma, Chief Economist, Infomerics Valuation and Ratings Ltd.
"The RBI’s Monetary Policy Committee (MPC) exceeded expectations by slashing the Repo rate by 50 basis points. Further, the cash reserve ratio (CRR) was reduced by 100 basis points from 4% to 3% in a staggered manner, implemented in four equal tranches of 25 basis points each, in the fortnights beginning September 6, October 4, November 1, and November 29 to provide durable liquidity. The cut in CRR is expected to release primary liquidity of about Rs 2.5 lakh crore to the banking system by the end of November 2025.

The RBI changed its stance from ‘accommodative’ to ‘neutral.’ The outlook for food inflation is soft, and the core inflation outlook remains benign. Given the benign inflation, the inflation forecast for the year has been revised downward from 4% to 3.7%. The FY26 GDP growth forecast is maintained at 6.5 %. The risks are evenly balanced."

"Rate cuts will spur lending, jobs, and growth": Dharan Shah, Founder, Tradonomy.AI
"The RBI's decisive 50 bps repo rate cut to 5.5% and a 100 bps CRR reduction over four quarters unleash a powerful boost for India’s economy. By lowering borrowing costs and freeing up bank liquidity, sectors like real estate, automobiles, and consumer durables are set to thrive. With CPI inflation at 3.7% and FY26 GDP growth projected at 6.5%, fueled by steady rural demand and rising urban consumption, the USDINR forward rate at ~86.72 signals stability. This dual policy move will likely spur lending, investment, and job creation, despite global uncertainties. Now the RBI stance being neutral, all future RBI events for the next few quarters will be non-events."

"Complex messaging: easing now, caution ahead": Sandeep Bagla, CEO, TRUST Mutual Fund

"MPC frontloaded the rate cuts, reducing repo rates by 50 bps and also cut CRR by 100 bps. These measures came as a positive surprise to equity markets as there will be greater impetus to growth and there could be faster pick up in the interest rate sectors. Oddly, RBI also changed its stance from accommodative to neutral, thereby signaling that further softening of monetary conditions may not be easily forthcoming. Bond markets experienced some steepening with shorter end of the yield curve seeing some softening. It is complex messaging from RBI where they have eased the policy rates and liquidity but made no promises for the future."

"Rate cuts support markets and rupee": Amit Pabari, MD, CR Forex
"The Reserve Bank of India has delivered a sharper-than-expected policy easing, cutting the repo rate by 50 basis points to 5.5% and slashing the Cash Reserve Ratio by 100 basis points to 3%. These aggressive rate cuts are providing strong support to Indian equity markets, while the CRR reduction is expected to inject approximately ₹2.5 lakh crore of liquidity into the banking system.

In addition, the RBI has shifted its policy stance from 'accommodative' to 'neutral', signalling that interest rates are likely to remain stable in the near term, which is supporting the rupee and limiting any further depreciation."