The Reserve Bank of India (RBI) announced a 25 basis point reduction in the repo rate, marking its first rate cut in nearly five years. The move aims to stimulate the nation’s slowing economy amid subdued economic growth and easing inflation.
Indian stocks were largely unchanged after the decision, with the Nifty 50 index ticking down 0.2%. However, China’s AI sector showed resilience, leading to a rise in Chinese shares despite US tariffs. Asian central banks have become more cautious about domestic growth outlook, resulting in pre-emptive rate cuts across the region.
Recent data showed that India’s retail inflation eased to a four-month low of 5.2% in December, but was still above the RBI’s medium-term target of 4%. Analysts believe this move will help stimulate economic growth and ease concerns about domestic demand.
The decision was made under new RBI Governor Sanjay Malhotra, who highlighted the necessary space for monetary easing due to the combination of subdued economic growth and easing inflation.
Source: https://www.investing.com/news/stock-market-news/asia-stocks-mixed-with-gains-in-china-shares-rbi-policy-move-in-focus-3855432