'Additional 75 bps Cut Possible, Home Loan Borrowers Should Refinance': Top analysts decode latest RBI MPC review

The Reserve Bank of India's decision to cut the repo rate by 25 basis points to 6.00 per cent and shift its policy stance to “accommodative” on Wednesday while announcing the first bi-monthly monetary policy of FY26 has prompted a chorus of reactions from market watchers, who broadly see the move as a necessary response to mounting global headwinds and domestic economic fragility.

RBI Governor Sanjay Malhotra, in the central bank’s first monetary policy review for FY26, cited a softening inflation outlook and evolving global trade tensions as key factors behind the rate action. Alongside the cut, the central bank also lowered its GDP growth forecast for FY26 to 6.5 per cent and trimmed its inflation estimate to 4 per cent.

Here’s how top analysts and financial leaders are reading the move:

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RBI may explore unconventional tools amid global volatility: Madhavi Arora

Madhavi Arora, lead economist at Emkay Global Financial Services, said the central bank appears to be keeping its toolkit ready for deeper economic shocks. "The RBI may want to keep ammunitions ready, given fluid global markets, apart from conventional easing. Options like non-conventional easing in the form of easier regulatory (lending) norms, lower daily CRR maintainance requirement for banks to sub 90 per cent, sterilised INR management, etc. may be used, if needed," Arora said.

She warned that the revised GDP forecast may still be too optimistic, citing risks of a global recession driven by prolonged US tariffs. We see downside risk of up to 70 bps to the RBI’s 6.5 per cent forecast, especially if private domestic demand stays tepid, she said.

Relief for borrowers, homeowners urged to refinance

Adhil Shetty, CEO of BankBazaar, noted that the cut should bring relief to home loan borrowers, particularly those with repo-linked loans. "Homeowners paying a substantially higher rate (50 bps or higher above prevalent rates) are advised to refinance their loans to avail lower rates. Do note that automatic, immediate and full rate cuts are available only on repo-linked home loans offered by banks," he advised.

Also Read:Key Takeaways from RBI MPC Meeting: Repo rate, Inflation, GDP forecasts, securitisation of stressed assets and more

Boost for fixed income, but eyes on global risks

Fund managers were generally upbeat on the fixed income outlook. Laukik Bagwe, head of fixed income at ITI Mutual Fund, called the move a “clear signal” of growth support.

"The monetary policy stance has shifted from 'neutral' to 'accommodative,' signalling the central bank's focus on fostering growth amid external pressures, such as the impact of US tariffs on global trade," he said adding, "External factors such as US tariff impacts on global growth, expectations surrounding US Federal Reserve rate cuts, and narrowing yield spreads between US Treasuries and Indian bonds could influence future decisions."

Mahendra Kumar Jajoo, CIO – Fixed Income at Mirae Asset Investment Managers, said that the RBI’s rate cut sets the stage for more positive sentiment in the debt market. He expects bond yields to fall further but noted that global tariff issues could make the RBI more cautious. He added that the central bank seems to be stepping up to support the economy, similar to what it did during the pandemic.

Rate cut to benefit NBFCs, banks and real estate

Naveen Kulkarni, chief investment officer at Axis Securities PMS, said the policy is likely to support lenders and NBFCs, especially with the rollback of higher risk weights, he said, "We believe NBFCs like Bajaj Finance, Shriram Finance, SBI Cards, and Cholamandalam Inv. & Fin. would benefit not only from the rate cuts but also from the RBI’s decision to roll back the higher risk weight on bank loans to NBFCs. Amongst banks, we prefer large private banks like HDFC Bank, Kotak Bank and ICICI Bank”

Meanwhile, Aditya Kushwaha, CEO of Axis Ecorp, said the move comes at a time when NRI interest in Indian property is rising.

Also Read: RBI FY26 CPI inflation projection lowered to 4%—See where RBI has placed its quarterly forecasts now

Watching global storm

Suresh Darak, founder of Bondbazaar, cautioned that while the RBI is addressing the domestic slowdown, global developments remain unpredictable.

"RBI seems to be trying to move past the tariff noise and addressing the demand slowdown concern with the repo rate cut of 25bps and change of stance to accommodative. Interesting times are up ahead over the next 1-2 months, and the US government's actions will significantly impact rates globally including in India," he said.