In a major step to aid economic growth, the Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points to 6% and changed its monetary policy stance from neutral to accommodative. This is the second rate cut in a row in 2025, reflecting the RBI's determination to promote growth despite increasing global uncertainties.
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Repo Rate Cut: The RBI cut the repo rate by 25 basis points to 6%, making lending cheaper for banks and potentially decreasing EMIs for households.
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Accommodative Stance: The change in stance means that attention is being given to lending support, with scope for further rate reduction in the future.
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GDP Growth Forecast: RBI has cut its GDP growth estimate for FY26 to 6.5% from 6.7% as a reflection of global economic troubles.
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Inflation Expectations: Retail inflation is expected to be 4% in FY26, with hopes that it will remain under control as food and crude oil prices are expected to decline.
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Liquidity Operations: The RBI has provided ample liquidity to the banking system to facilitate easy monetary transmission.
This accommodative policy is aimed at mitigating the effect of global trade tensions and bolstering domestic economic recovery. The actions of the RBI are meant to balance growth and inflation control so that the economic environment is stable.
Source Name: Indian Express, Financial Express, News18.