RBI’s Strategic Pause: Liquidity Takes Center Stage Over Rate Cuts

The Reserve Bank of India (RBI) may adopt a cautious approach to rate cuts as recent liquidity measures bolster the banking sector. According to BNP Paribas, the RBI’s focus on flexible liquidity tools could reduce the urgency for accelerated rate reductions. This strategy aims to sustain credit growth and stabilize net interest margins (NIMs), even as deposit rates ease. With a projected 13% system-level credit growth for the year, top-tier private banks like HDFC Bank, ICICI Bank, and Axis Bank are poised to benefit from the evolving financial landscape. The RBI’s balanced approach underscores its commitment to fostering economic resilience.

Read More