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Economic Times
4 days ago
- Automotive
- Economic Times
RBI rate cut to positively impact automobiles sector
New Delhi, The decision of the Reserve Bank to cut policy rate by 50 basis points will have a positive impact on the automobile sector as it will make loans cheaper, industry body SIAM said on Friday. The RBI on Friday cut repo rate by a higher-than-expected 50 basis points to prop up growth, which has slowed to a four-year low of 6.5 per cent in FY25. Following the rate cut, the key policy rate eased to a three-year low of 5.5 per cent, providing relief to home, auto and corporate loan borrowers. "Such reduction in repo rates would have a positive impact on the auto sector since it would lead to increased accessibility to finance at reduced costs, thereby creating a positive sentiment amongst the consumers in the market," the Society of Indian Automobile Manufacturers (SIAM) President Shailesh Chandra said in a statement. The Automotive Component Manufacturers Association of India (ACMA) said the RBI's decision to reduce the repo rate by 50 basis points and to ease the Cash Reserve Ratio is a timely and proactive step toward stimulating domestic demand and supporting industrial growth, especially in the backdrop of persistent global headwinds. "The reduction in interest rates is expected to translate into lower borrowing costs for both consumers and businesses, thereby providing a much-needed boost to the automotive sector, which has been navigating a complex macroeconomic environment," ACMA President Shradha Suri Marwah stated. The infusion of liquidity through the CRR cut will further ease working capital pressures, particularly for MSMEs that form the backbone of the auto component industry, she added. Mahindra Group CEO & MD Anish Shah said the move demonstrates the RBI's confidence in the macroeconomic fundamentals and its proactive approach to supporting sustainable expansion. The rate cut will serve as a positive catalyst for consumption and investment, particularly in interest-sensitive sectors such as automobiles, housing, and MSMEs, he added. It will also ease borrowing costs, improve liquidity, and further strengthen the momentum behind India's infrastructure and manufacturing push, Shah said. Renault India Country CEO & MD Venkatram Mamillapalle said the policy is expected to strengthen liquidity and accelerate the transmission of lower interest rates to consumers, which will spur demand in the economy. "For the automotive sector, this translates directly into improved access to affordable vehicle financing, especially in the entry and mid-level segments," he stated. PTI
Time of India
4 days ago
- Automotive
- Time of India
RBI rate cut to positively impact automobiles sector
New Delhi, The decision of the Reserve Bank to cut policy rate by 50 basis points will have a positive impact on the automobile sector as it will make loans cheaper, industry body SIAM said on Friday. The RBI on Friday cut repo rate by a higher-than-expected 50 basis points to prop up growth, which has slowed to a four-year low of 6.5 per cent in FY25. Following the rate cut, the key policy rate eased to a three-year low of 5.5 per cent, providing relief to home, auto and corporate loan borrowers. "Such reduction in repo rates would have a positive impact on the auto sector since it would lead to increased accessibility to finance at reduced costs, thereby creating a positive sentiment amongst the consumers in the market," the Society of Indian Automobile Manufacturers (SIAM) President Shailesh Chandra said in a statement. Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Free P2,000 GCash eGift UnionBank Credit Card Apply Now Undo The Automotive Component Manufacturers Association of India ( ACMA ) said the RBI's decision to reduce the repo rate by 50 basis points and to ease the Cash Reserve Ratio is a timely and proactive step toward stimulating domestic demand and supporting industrial growth, especially in the backdrop of persistent global headwinds. "The reduction in interest rates is expected to translate into lower borrowing costs for both consumers and businesses, thereby providing a much-needed boost to the automotive sector, which has been navigating a complex macroeconomic environment ," ACMA President Shradha Suri Marwah stated. Live Events The infusion of liquidity through the CRR cut will further ease working capital pressures, particularly for MSMEs that form the backbone of the auto component industry, she added. Mahindra Group CEO & MD Anish Shah said the move demonstrates the RBI's confidence in the macroeconomic fundamentals and its proactive approach to supporting sustainable expansion. The rate cut will serve as a positive catalyst for consumption and investment, particularly in interest-sensitive sectors such as automobiles, housing, and MSMEs, he added. It will also ease borrowing costs, improve liquidity, and further strengthen the momentum behind India's infrastructure and manufacturing push, Shah said. Renault India Country CEO & MD Venkatram Mamillapalle said the policy is expected to strengthen liquidity and accelerate the transmission of lower interest rates to consumers, which will spur demand in the economy. "For the automotive sector, this translates directly into improved access to affordable vehicle financing, especially in the entry and mid-level segments," he stated. PTI
Time of India
4 days ago
- Business
- Time of India
Nilesh Shah praises RBI's bold rate cut, says even Trump may urge Fed to follow
After the Reserve Bank of India slashed the repo rate by 50 basis points to 5.50% and announced a 100 basis point cut in the Cash Reserve Ratio ( CRR ), Nilesh Shah of Kotak Mutual Fund praised the bold move. He even remarked that President Trump might urge the U.S. Federal Reserve to follow the RBI 's lead. On the social media platform X, Shah wrote: 'The RBI, after a cautious start, shifted gears for big hits. A jumbo repo rate cut of 50 bps and a CRR cut of 100 bps is well ahead of market expectations. Both bond and equity markets will likely react positively to this front-loading, which should outweigh concerns around the shift in. President Trump may request US Fed to follow the RBI' Also Read | RBI slashes rates by 50 bps: What it means for debt mutual fund investors Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 21st Century Skills Start with Confident Communication Planet Spark Learn More According to Shah, the RBI delivered a strong and unexpected stimulus to the markets with a jumbo 50 basis points cut in the repo rate and a 100 basis points reduction in the Cash Reserve Ratio (CRR). These moves, he noted, went way ahead of market expectations and reflected the central bank's approach in addressing economic concerns. Live Events He added that both the bond and equity markets are likely to respond positively to this front-loaded strategy and will overcome the prudent measure of change in stance. The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Friday in its bi-monthly monetary policy review meeting has decided to reduce the policy rate by 50 basis points to 5.5%. This is the third consecutive rate cut by RBI in the current calendar year and the second one in the current financial year. This marks the third consecutive cut under Governor Malhotra. Here is how some other experts decode the rate cut by RBI for the mutual fund investors: Adhil Shetty, CEO of The RBI's bold 50 basis points repo rate cut, bringing it down to 5.5%, marks a significant shift in monetary policy. With inflation now under control and liquidity set to improve further due to the phased CRR cut, we expect bond yields to soften. This is a positive signal for debt mutual funds , particularly long-duration and gilt funds, as falling interest rates tend to push up bond prices, boosting returns. Equity mutual funds, especially those focused on rate-sensitive sectors like banking, auto, and real estate, may benefit from the improved outlook. For investors, this is a good opportunity to rebalance portfolios in line with the evolving interest rate cycle. While equity markets may remain volatile in the short term, the overall policy direction supports a constructive view on both debt and equity mutual funds in the coming quarters. Also Read | MF Tracker: Will this Rs 30,000 crore smallcap fund continue to maintain its long-term performance? Marzban Irani, CIO of Fixed Income at LIC Mutual Fund RBI has reiterated that it is committed to ensure price stability and is focused on supporting growth. Any further policy decisions will continue to remain data dependent. Recommended to invest in tenure ranging 3 month to 3 year schemes to take advantage of CRR cut. Vishal Goenka, Co-Founder of Investors should look at 2-3y corporate bonds for their portfolio as they continue to offer good spreads over government and FD rates and interest rates will come down more gradually for corporate bonds Sandeep Bagla, CEO, TRUST MutualFund 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.
Economic Times
4 days ago
- Business
- Economic Times
Nilesh Shah praises RBI's bold rate cut, says even Trump may urge Fed to follow
The Reserve Bank of India (RBI) surprised markets with a significant 50 basis point repo rate cut to 5.50% and a 100 basis point CRR reduction. Nilesh Shah believes this bold move will positively impact bond and equity markets, even suggesting the U.S. Federal Reserve might follow suit. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Here is how some other experts decode the rate cut by RBI for the mutual fund investors: Adhil Shetty, CEO of Marzban Irani, CIO of Fixed Income at LIC Mutual Fund Tired of too many ads? Remove Ads Vishal Goenka, Co-Founder of Sandeep Bagla, CEO, TRUST MutualFund After the Reserve Bank of India slashed the repo rate by 50 basis points to 5.50% and announced a 100 basis point cut in the Cash Reserve Ratio ( CRR ), Nilesh Shah of Kotak Mutual Fund praised the bold move. He even remarked that President Trump might urge the U.S. Federal Reserve to follow the RBI 's the social media platform X, Shah wrote: 'The RBI, after a cautious start, shifted gears for big hits. A jumbo repo rate cut of 50 bps and a CRR cut of 100 bps is well ahead of market expectations. Both bond and equity markets will likely react positively to this front-loading, which should outweigh concerns around the shift in. President Trump may request US Fed to follow the RBI'According to Shah, the RBI delivered a strong and unexpected stimulus to the markets with a jumbo 50 basis points cut in the repo rate and a 100 basis points reduction in the Cash Reserve Ratio (CRR). These moves, he noted, went way ahead of market expectations and reflected the central bank's approach in addressing economic added that both the bond and equity markets are likely to respond positively to this front-loaded strategy and will overcome the prudent measure of change in Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Friday in its bi-monthly monetary policy review meeting has decided to reduce the policy rate by 50 basis points to 5.5%.This is the third consecutive rate cut by RBI in the current calendar year and the second one in the current financial year. This marks the third consecutive cut under Governor RBI's bold 50 basis points repo rate cut, bringing it down to 5.5%, marks a significant shift in monetary policy. With inflation now under control and liquidity set to improve further due to the phased CRR cut, we expect bond yields to soften. This is a positive signal for debt mutual funds , particularly long-duration and gilt funds, as falling interest rates tend to push up bond prices, boosting mutual funds, especially those focused on rate-sensitive sectors like banking, auto, and real estate, may benefit from the improved outlook. For investors, this is a good opportunity to rebalance portfolios in line with the evolving interest rate cycle. While equity markets may remain volatile in the short term, the overall policy direction supports a constructive view on both debt and equity mutual funds in the coming has reiterated that it is committed to ensure price stability and is focused on supporting growth. Any further policy decisions will continue to remain data dependent. Recommended to invest in tenure ranging 3 month to 3 year schemes to take advantage of CRR should look at 2-3y corporate bonds for their portfolio as they continue to offer good spreads over government and FD rates and interest rates will come down more gradually for corporate bondsMPC 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.
