In a decisive move aimed at reinforcing economic momentum, the Reserve Bank of India (RBI) slashed the repo rate by 50 basis points to 5.5%—its lowest level in nearly three years. This third consecutive cut, paired with a shift to a neutral policy stance, underscores the central bank’s commitment to supporting growth amid a cooling inflation environment. The unexpected magnitude of the cut has drawn a broadly positive response from industry experts, who view it as a timely stimulus to boost domestic consumption, credit expansion, and sentiment across key sectors such as real estate, housing finance, and consumer lending.
Below are their detailed reactions:
Mr Vimal Nadar, National Director & Head, Research, Colliers India
The RBI has reduced the repo rate further by a strong 50 bps – bringing it down to 5.5%, the lowest in almost three years. The third consecutive reduction in benchmark lending rate coupled with shifting to neutral stance reaffirms the growth-supportive monetary policy aided by softening of inflation levels. Despite external volatilities and evolving trade scenarios, the Central Bank projects the domestic economy to grow at 6.5% in Fiscal 2025-26. For the real estate sector, this move is a strong tailwind: it lowers borrowing costs for buyers & developers, boosts homebuyer confidence, and enhances affordability, especially in the affordable and mid-income housing segments. This could lead to improved buyer sentiment, an increase in residential property enquiries and conversions, and a pickup in sales volumes across key urban markets. Over the medium term, the reduction in the cost of capital is also expected to enhance investor confidence, potentially boosting activity in both residential and commercial real estate segments.
Amit Prakash Singh, CBO Urban Money & Co-Founder Square Yards
“The RBI’s decision to cut the repo rate by 50 basis points was on the expected lines and marks a proactive step toward stimulating economic growth. This substantial reduction is expected to ease borrowing costs significantly, reduce EMIs, and increase disposable income — all of which are likely to support domestic consumption and drive demand across sectors. With inflation well within the RBI’s comfort range, the move reinforces the central bank’s focus on growth and is poised to have a meaningful impact on the credit landscape, encouraging both consumer and business lending. It signals a timely and growth-oriented policy stance in the face of a moderating economic outlook.”
Piyush Bothra, Co-Founder and CFO, Square Yards
“The 50-basis point rate cut, though bold but expected, reflects the central bank’s acknowledgement of a shifting macroeconomic landscape. With the full-year FY25 GDP growth projected at only 6.5% — slowest since the pandemic, there is clear evidence of softening momentum. With inflation at a manageable 3%, the RBI had enough headroom to ease policy without triggering price instability. For the real estate sector, which has already been witnessing mellowed growth — this move is the right dosage which was required to unleash the animal spirits. A 50-bps reduction will translate into meaningful EMI savings, improving affordability for homebuyers. It will also give developers greater confidence to move ahead with new launches, especially in the low-to-mid segments.”
Shrinivas Rao, FRICS, CEO, Vestian said, “As expected, RBI lowered the repo rate amid global growth slowdown to boost domestic consumption. This is the third rate cut since the start of the year, as headline inflation has softened and is below the target range of 4%. Since February 2025, the RBI has cut the repo rate by 100 basis points (currently standing at 5.5%) with no headroom left for further rate cuts. Hence, the central bank has changed its stance from ‘Accommodative’ to ‘Neutral’ to carefully observe the global scenario and act accordingly. Major commercial banks are expected to pass on this benefit to homebuyers and developers by lowering interest rates, stimulating real estate demand and investments.”
Views on RBI MPC – Rajani Sinha, Chief Economist, CareEdge
In its latest monetary policy meeting, the Monetary Policy Committee (MPC) announced a 50-bps cut in the policy rate – exceeding expectations and effectively frontloading the rate reductions for the remainder of the year. The shift in policy stance from “accommodative” to “neutral” suggests limited room for further policy easing in the current cycle.
In a complementary move, the RBI also announced a 100-bps reduction in the CRR, expected to inject approximately Rs 2.5 trillion in durable liquidity into the system. This measure should bolster credit growth and further facilitate smoother transmission of the policy rate cuts, thereby supporting overall economic growth. The governor’s tone remained broadly dovish, underlining the central bank’s intent to prioritise growth. The RBI’s decision to keep growth projections unchanged for FY26 at 6.5% was on expected lines. Our forecast however remains slightly more conservative, projecting FY26 growth at 6.2% amidst global headwinds and policy uncertainties.
On the inflation front, the RBI revised its projection downward to 3.7%, indicating a significant moderation in inflationary pressures. However, we continue to maintain a higher inflation estimate of 4% for FY26, considering weather-related risks. There are already early reports of crop damages in parts of south India from early monsoon this year which can add to the CPI inflation in coming months. Looking ahead, we do not anticipate any further rate cuts from the RBI unless downside risks to growth materialize.
