New guv makes the cut

The policy rate hadn’t moved in 24 months, nor was there a rate cut in 57 months. After that long lag, yesterday, RBI, under its new governor, Sanjay Malhotra, sliced 25 basis points (bps) off the repo rate, as expected, following a gradual decline in inflation amid lower-than-expected economic growth.

Geopolitical uncertainties, imminent tariff wars and increasingly insular industrial policies are the order of the day. Such factors alter trade dynamics, disrupt well-established supply chains and reduce productivity. And even countries not in the wake of such actions see collateral impact.

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