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SAMCO Securities head of research Apurva Sheth on RBI Policy
This story was originally published at 14:51 IST on 5 December 2025
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MUMBAI- Apurva Sheth, head of market perspectives and research, SAMCO Securities, said the following on the Reserve Bank of India's fifth bi-monthly monetary policy for 2025-26 (Apr-Mar) detailed on Friday:
The Reserve Bank of India delivered a 25 basis points rate cut, bringing policy rates to their lowest level since July 2022. The move was widely anticipated as real interest rates had climbed to decadal highs. Even after today's cut, real rates hover near 5%, which is far too restrictive for an economy that needs healthy nominal growth to sustain earnings, tax collections, and debt dynamics. Inflation has been tamed, growth remains resilient. Monetary policy has space to support the next leg of expansion. With real rates still deeply positive, RBI retains ample room for further easing if conditions remain supportive.
A weaker currency is the main cause of concern for the RBI. Right after the cut, we saw the rupee give some of its gains in the last two days. Further rate cuts will push the rupee even lower until foreign investors come back in a big way. Currency and growth are the two major factors RBI needs to balance now after benign inflation.
Compiled by Gopika Balasubramanium
Filed by Avishek Dutta
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