We are seeing big moves but also quiet signals. India’s macro machinery is firing on all fronts but not always where most people are looking. The Reserve Bank of India (RBI) has gone bold with a surprise 50bp rate cut and a deeper Cash Reserve Ratio slash. But it has also shifted into mop-up mode, draining liquidity almost as fast as it’s injected it. The Rupee is still under pressure albeit quietly defended. And while employment data looks steady, youth joblessness remains high. What we’re seeing is a tactical, almost surgical balancing act - easing at the front, tightening at the edges, and signalling discipline without rattling markets. The message? The system is stable but nothing is being left to chance.
Monetary Policy
The RBI caught markets off guard in June with a 50bp repo rate cut, bringing it down to 5.5%, alongside a 100bp CRR reduction. That is the deepest easing move since the pandemic. It also marked a formal shift to a neutral stance, setting the stage for a pause - or ...
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