The Reserve Bank of India cut its key repo rate by 25 basis points to 6.25%, the first cut in nearly five years. This decision from the Monetary Policy Committee aims to stimulate economic growth and offers relief to borrowers with lower EMIs.

The repo rate, set by the RBI, influences borrowing costs for banks. A higher repo rate raises FD interest rates, attracting deposits, while a lower rate reduces FD returns by making borrowing cheaper.

With the recent liquidity injection by the Reserve Bank of India (RBI) and rising market optimism, a decision by the RBI to cut interest rates could result in positive sentiment across sectors.

The MPC had changed its policy stance to neutral in October and cut banks' cash reserve ratio by 50 bps in December to ease liquidity stress in the banking system

As per Emkay Research, the Reserve Bank of India (RBI) may need to implement measures beyond rate cuts to enhance banking liquidity. Key suggestions include Open Market Operations of Rs 30,000 crore and easing liquidity norms.

The Reserve Bank of India (RBI) will have to look for additional measures other than a rate cut to infuse enough liquidity in the banking system according to a report by Emkay Research.Among other options suggested by Emkay Research,

The Reserve Bank of India is widely expected to cut interest rates for the first time in nearly five years. This is according to a Reuters survey of economists and analysts. Inflation in India has declined;