Agri and All Trade Chamber welcomes RBI’s decision to reduce repo rate, cash reserve ratio

Agri and All Trade Chamber has welcomed the Reserve Bank of India’s decision to reduce the repo rate from 6% to 5.5% and cash reserve ratio (CRR) by 1%.

Its president S. Rethinavelu, in a press statement, said this decision is expected to significantly improve liquidity in the banking system with the CRR cut alone releasing around ₹2.5 lakh crore into the economy. The lower repo rate will allow the banks to borrow at cheaper rates from the RBI which is likely to lead to reduced lending rates for home loans, vehicle loans and business borrowings, besides agriculture and MSMEs.

This reduction in the repo rate is expected to ease borrowing costs injecting much needed liquidity into the system. The rate cut will serve as a catalyst for growth and confidence, particularly at a time when input costs have been fluctuating and credit demand in the agricultural sector is rising, he said.

These measures would strengthen MSMEs’ ability to access loans and scale operations and thereby create more employment. This monetary policy adjustment will ease working capital pressures and encourage industrial players to invest in productivity, innovation, and green infrastructure contributing to national growth and global competitiveness. The rate cut will encourage technology adoption and plant modernisation and support export-oriented industries by improving cost-efficiency, he said.

He urged banks to ensure that the benefits are promptly passed on to businesses, farmers, and industrial enterprises, thereby maximising the impact of the RBI’s progressive move.