RBI MPC Meeting Live Updates: Impact of Trump tariffs much less on India than others, says RBI Guv

Reserve Bank Governor Sanjay Malhotra on Wednesday said the central bank does not target any level or band for the rupee-dollar exchange rate, but intervenes in forex market only when there is excessive volatility.

Talking to reporters after the announcement of the April monetary policy, the Governor said the impact the US tariffs on India, vis-a-vis some of the other countries, including China and even the smaller nations is much less.

"...we are better placed than some of the other countries...we have a comparative advantage," Malhotra said but admitted that the tariffs are a "growth dampener".

The Governor was replying to a question about RBI's currency management strategy as China is likely to use Chinese yuan depreciation as a tool to counter US tariffs.

"So far as the currency management is concerned we do not actually intervene in the currency management. It's only...for excessive or disruptive volatility that we do. So we do not try to manage or target any reach or band or level of the Indian rupee," Malhotra said. (PTI)

Mr. Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation said, "The two consecutive policy rate reductions by the RBI, of 25 basis points each, are expected to significantly benefit home buyers. Many prospective buyers who had been cautiously observing the market are now likely to take a decisive step towards purchasing their dream homes. Simultaneously, the reduction in rates will lower borrowing costs for developers, encouraging them to launch more projects in the coming quarters to meet anticipated demand. This dual impact is expected to stimulate both housing demand and supply, providing a positive momentum to the real estate sector."

In a post-MPC meeting presser, RBI Governor Sanjay Malhotra said that the impact of the tariffs imposed by Donald Trump-led US administration on India is less compared to that on other countries. He added that India currently has a comparative advantage.

Reserve Bank Governor Sanjay Malhotra on Wednesday said that trade tariff related measures have clouded the economic outlook across regions, posing risk of new headwinds for global growth and inflation.

On the ramifications of a global tariff war on India, he said it shall have a negative impact on the country's exports.

"Merchandise exports will be weighed down by global uncertainties, while services exports are expected to remain resilient. Headwinds from global trade disruptions continue to pose downward risks," he said while unveiling the first bi-monthly monetary policy statement for the current financial year.

RBI has also lowered the growth projection to 6.5 per cent from the earlier estimate of 6.7 per cent for the current financial year due to global uncertainties.

"While the risks are evenly balanced around these baseline projections, uncertainties remain high in the wake of the recent spike in global volatility. It may be noted that the growth projection for the current year has been marked down by 20 basis points relative to our earlier assessment of 6.7 per cent in the February policy," he said. (PTI)

Reacting to the RBI repo rate cut, Samir Jasuja, Founder & CEO, PropEquity said, " Average housing prices have risen by approximately 50% post-Covid. At this juncture, the two consecutive cuts in repo rate, in February and April 2025, will provide a cushion to home loan borrowers as EMIs will come down. As home loan rates drop, fence-sitters will be encouraged to make housing purchases."

He added, "Developers will benefit from reduction in borrowing cost thereby enabling them to expand and launch new projects. The change in stance to accommodative signals further rate cut, a welcome move for the housing sector."

Mr. Prashant Sharma, President, NAREDCO Maharashtra, said, "The RBI’s decision to reduce the repo rate by 25 basis points to 6% comes as a welcome and timely move for the Indian economy. At a time when global headwinds and tariff concerns loom large, the accommodative stance by the MPC will serve as a much-needed catalyst to revive consumption and investment cycles."

He added, "For the real estate sector, this signals increased affordability for homebuyers and improved liquidity conditions for developers. It will directly impact housing demand, particularly in the affordable and mid-income segments, and will boost sentiments in the real estate sector. This policy stance will further encourage transparency and trust, essential for sustainable sectoral growth."

After RBI announced its repo rate cut on Wednesday, the interest rates on home loans, personal loans, deposits and vehicle loans are expected to go down.

The rate setting panel also changed the monetary policy stance from neutral to accommodative – signaling further reductions in the repo rate.

RBI Governor Sanjay Malhotra said that amid global uncertainties, added pressure on Indian currency is expected. "Investment activity has gained traction, expected to improve further on back of sustained capacity utilisation," he added.

RBI Governor Sanjay Malhotra announced that the MPC decided to cut the repo rates by 25 base points in its second consecutive rate cut. This comes just an hour after the Trump tariffs came into effect for India and other countries.

Indian stock markets on Wednesday reversed the gains, with both indices declining in opening, taking cues from global markets as Trump announced China tariffs of 104 per cent loom, showing no near relief in the tariff dark clouds.

The Nifty 50 index declined by -75.55 (-0.34 per cent) to open at 22,460.30, while the BSE Sensex opened at 74,103.83 with a decline of -123.25 points or -0.17 per cent.

Experts stated that today, the RBI MPC announcement is the main focus for Indian stock markets, but Trump's tariff effect is still significant, dragging markets globally.

Both Sensex and Nifty opened in red on Wednesday morning, less than an hour before RBI is set to announce the first repo rate for financial year 2025-2026. At 9.15 am, Sensex was down 249 points while Nifty was down 97 points as the trade opened for the day.