The Reserve Bank of India (RBI) on Wednesday reduced the key lending rate, or repo rate, by 25 basis points, bringing it down to 6%. The decision was announced after the central bank’s Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, concluded its three-day meeting that began on April 7.
"After a detailed assessment of the evolving macroeconomic and financial conditions and outlook, the MPC voted unanimously to reduce the policy repo rate by 25 basis points to 6% with immediate effect," said Sanjay Malhotra.
This is the second rate cut in a row, following a 25 basis point reduction in February. It is also the second major address by Sanjay Malhotra since he took charge as RBI Governor in December 2024.
The move comes at a time when inflation has dropped below 4% and there are growing concerns over slower economic growth. The central bank has taken this step to support demand and give a boost to investment.
The standing deposit facility (SDF) rate under the liquidity adjustment facility was adjusted to 5.75%, and the marginal standing facility rate (MSF rate) was adjusted to 6.25%.
RBI also changed its earlier stance from neutral to 'accommodative'.
"It also decided to change the stock from neutral to accommodative. It also noted that the rapidly evolving situation requires continuous monitoring and assessment of the economic outlook," said the RBI Governor.
The Reserve Bank of India (RBI), in its latest Monetary Policy Committee (MPC) meeting held on Wednesday, reduced its growth forecast for the financial year 2025-26 to 6.5%. This is a cut of 20 basis points from its earlier estimate of 6.7% made in February.
