'Best the coach can do': Kotak's Nilesh Shah on RBI's 25 bps rate cut amid Trump tariff tension

Kotak Mutual Fund MD Nilesh Shah on Wednesday likened the Reserve Bank of India's latest rate cut to a cricket coach preparing players for a tough match under hostile conditions. For him, the RBI has done its part — now it’s up to the players.

"The RBI has equipped the Indian Economy with helmet (liquidity), Bat and other accessories (interest rate cut) and pep talk (change of stance to accommodation) so that it can play on a green top wicket in a cold and cloudy (geo economical and political environment) morning against the seaming, fast and unpredictable bowling of President Trump,” Shah wrote on X. “This is the best the coach can do. Now the players have to play it out so that we can score runs when the weather clears and pitch eases.”

Earlier today, the RBI slashed the key policy interest rate by 25 basis points—the second cut in a row—to help shield the economy from external shocks, particularly the escalating tariff measures announced by the United States. With this move, the repo rate stands reduced to 6 per cent, easing borrowing costs for home, auto, and corporate loans.

The previous rate cut came in February, also by 25 basis points, and before that, rates were last changed in February 2023, when they were raised to 6.5 per cent. RBI Governor Sanjay Malhotra said the Monetary Policy Committee's decision to cut rates was unanimous. He also announced a downward revision of the GDP growth forecast from 6.7 per cent to 6.5 per cent, citing global uncertainties.

The cut comes days after US President Donald Trump imposed a hefty 26 per cent reciprocal tariff on Indian imports, effective April 9, triggering fresh concerns about trade and economic headwinds.

Shah, reacting separately to the fast-changing market dynamics, urged investors not to rush in blindly. "Events will drive the market. They are unfolding fast in an unprecedented manner. No point trying to predict markets. Picture Abhi Baki Hai. Buy in correction but don’t be in a hurry to deploy," he posted.

The domestic stock market, which had suffered its worst single-day fall in 10 months, bounced back strongly on Tuesday. The Sensex surged 1,089.18 points to close at 74,227.08, while the Nifty rose 374.25 points to end at 22,535.85. Analysts attributed the recovery to improving global cues and investor optimism.

"Following positive global cues, led by the interest of many nations to enter into bilateral agreements with the US, the domestic market witnessed a recovery," Vinod Nair, Head of Research, Geojit Investments Limited, said.