RBI'S DOUBLE DELIGHT

Repo rate, CRR see deep cuts

- MAHESH NAYAK

• MPC BETS ON GROWTH WITH STEEPEST RATE CUT IN 5 YEARS

• CASH RESERVE RATIO REDUCED 100 BPS IN STAGES FROM SEPT

• POLICY STANCE SHIFTS TO NEUTRAL, INDICATING PROLONGED PAUSE

THE MONETARY POLICY Committee (MPC) delivered a twin surprise on Friday - a higher-than-expected 50 basis point (bps) repo rate reduction and a 100 basis points cut in the cash reserve ratio (CRR). They were accompanied by another unexpected move-a change in stance from "accommodative" to "neutral", which means that after the latest round of cut-a total of 100 basis points since February there is likely to be a prolonged pause.

"Certainty in the uncertain environment was necessary; hence the front-loading of rate cuts which should ensure faster transmission of policy rates," RBI governor Sanjay Malhotra said at a post-policy press conference.

"After having cut the policy rate by 100 basis points in quick succession since February 2025, the monetary policy committee also felt that under the present circumstances, monetary policy is now left with very limited space to support growth," he said.