The Reserve Bank of India (RBI) has announced its first monetary policy of Fiscal Year (FY) 2025-26 today, April 9. The RBI has reduced the benchmark repo rate by 25 basis points (bps) to 6.00% from 6.25%. This decision was taken unanimously by the monetary policy committee (MPC).
This is the second consecutive rate cut, with the last reduction done in February, this year. Moreover, the marginal standing facility rate stands at 6.25% as of now.
Meanwhile, between May 2020 and February 2025, the central bank has raised interest rates seven times, reaching 6.50%. Until February 2025, RBI had kept the benchmark rates unchanged since February 2023.
RBI Governor Malhotra unveiled the decision in the monetary policy statement on Wednesday. During his address, Malhotra pointed out towards the global uncertainties following the reciprocal tariffs announcement by US President Donald Trump.
Key Takeaways Of The RBI MPC Meeting
- MPC unanimously decided to reduce the policy repo rate by 25 bps to 6%.
- The standing deposit facility (SDF) rate has been revised to 5.75%.
- The marginal standing facility (MSF) rate and the Bank Rate has been revised to 6.25%.
- MPC changed its policy stance to “accommodative” from “neutral”.
- RBI has projected a real GDP growth rate of 6.5% for fiscal year 2025-26.
- RBI has projected a Consumer Price Index (CPI) inflation rate of 4% for fiscal year 2025-26.
- The meeting of the MPC was scheduled during April 7 to 9, 2025.
What Else?
RBI Governor Malhotra high-lightened the challenges surrounding the economy. The MPC noted that the global economic outlook is fast changing. The recent trade tariff related measures have exacerbated uncertainties clouding the economic outlook across regions, posing new headwinds for global growth and inflation.
Moreover, MPC highlighted that the financial markets have responded through sharp fall in dollar index and equity sell-offs with significant softening in bond yields and crude oil prices.
Notably, the next meeting of the MPC is scheduled from June 4 to 6, 2025.
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