Repo rate cuts signal a resolve to revive investor, consumer sentiment | The Indian Express

Repo rate cuts signal a resolve to revive investor, consumer sentiment | The Indian Express

Written by Saugata Bhattacharya |Updated: October 5, 2019 11:31:42 am

The writer is senior vice president, business and economic research, Axis Bank. Views are personal

Repo rate cuts signal a resolve to revive investor, consumer sentiment

RBI analytics suggest that the slowdown is largely cyclical, and in macroeconomic terms, this is probably correct.

The reason for this strong signal showed up in the steep reduction in RBI’s FY20 GDP growth projection, from to 6.9 per cent in August down to 6.1 per cent. (Representational Image)

The Monetary Policy Committee (MPC) cut the repo rate again, the fifth time since February 2019 by 0.25 percentage points, based on the views of the MPC members on current and projected economic conditions. The MPC action was in line with the series of cuts by almost all major central banks across the globe, as counter-cyclical policy responses to the global slowdown. The MPC voted unanimously on the cut, with one member recommending a deeper cut. The accommodative policy stance was retained, signalling a strong resolve to support the revival of growth, evocative of the ECB President Mario Draghi’s memorable 2012 commitment to do “whatever it takes to preserve the euro”.