Executive Summary
This report provides a comprehensive analysis of the Reserve Bank of India’s (RBI) monetary policy changes over the last three years (2022–2025), particularly focusing on repo rate movements and their consequent impact on equity markets and key sectors. The analysis includes detailed repo rate timelines, sectoral reactions, and implications on indices such as Nifty 50, Sensex, and Bank Nifty.
1. Introduction The RBI’s repo rate, a key instrument of monetary policy, has been actively used over the past three years to balance inflationary pressure and growth concerns. This period saw an aggressive tightening cycle during 2022 and 2023, followed by a policy reversal in 2025 aimed at stimulating economic activity amid global uncertainties.
Index Performance Snapshot Around Rate Movements
| Period | Policy Stance | Market Sentiment | Sectoral Leadership |
| 2022-2023 | Aggressive Hikes | Cautious/Negative | Defensive sectors, FMCG, select IT Defensive sectors, FMCG, select IT |
| 2023–2024 | Stable | Neutral | Range-bound performance across indices |
| 2025 Onward | Rate Cuts | Positive Bias | Banks, Auto, Real Estate, Consumer |
Strategic Investment Outlook
| Sector | Positioning | Investment Rationale |
| Banking & NBFCs | Overweight | Improved margins, credit cycle recovery |
| Real Estate | Overweight | Supportive policy environment, revival in urban housing |
| Automobile | Overweight | Loan-driven demand recovery, strong rural sentiment |
| Consumer Durables | Positive Bias | Rebound in consumption, low-cost financing |
| Information Technology | Neutral | Dependent on global economic environment |
| FMCG | Mildly Positive | Better rural demand with improved liquidity |
Repo Rate changes over the last three years. It includes the date, action taken (hike/cut/unchanged), basis points change, and the resulting repo rate:
| Date | Action | Change (bps) | Repo Rate (%) |
| Apr 9, 2025 | Cut | -25 | 6.00 |
| Feb 7, 2025 | Cut | -25 | 6.25 |
| Feb 8, 2023 | Hike | +25 | 6.50 |
| Dec 7, 2022 | Hike | +35 | 6.25 |
| Sep 30, 2022 | Hike | +50 | 5.90 |
| Aug 5, 2022 | Hike | +50 | 5.40 |
| Jun 8, 2022 | Hike | +50 | 4.90 |
| May 4, 2022 | Hike | +40 | 4.40 |
| Apr 8, 2022 | Unchanged | 0 | 4.00 |
Summary:
- Starting rate (Apr 2022): 4.00%​
- Peak rate (Feb 2023 to Feb 2025): 6.50%​
- Current rate (Apr 2025): 6.00%​
- Total hikes (2022–2023): +250 bps​
- Total cuts (2025 so far): -50 bps​
Conclusion
The RBI’s monetary policy cycle between 2022 and 2025 underscores the balancing act between controlling inflation and supporting growth. Aggressive rate hikes in 2022–2023 successfully managed inflation but at the cost of market performance and consumption-led growth. The recent reversal in 2025 with rate cuts has restored investor sentiment and opened opportunities for growth in interest-rate sensitive sectors.
As India navigates a pro-growth trajectory, financial markets are likely to benefit from accommodative policy, strong corporate earnings recovery, and improved consumer confidence. A selective, sector-focused investment strategy remains key in this evolving macroeconomic environment.
Until then, Happy Trading!
Commodity Samachar Securities
We Decode the Language of the Markets
Also Read: Gold Faces Liquidity Squeeze, But Still Poised to Surpass $3,000 , TARIFFS — RBI Policy in Focus as Nifty Faces Expiry – Will Markets Break Out or Break Down?
Recommended Read: India’s Semiconductor Surge: Powering the Future of Electronics!
Want Help On Your Trades ?
Chat with RM
