RBI Cuts Rates, Forecasts Lower Inflation for FY26

RBI Governor Sanjay Malhotra, In his debut policy announcement, RBI Governor Sanjay Malhotra delivered a 25 basis point cut in the repo rate to 6.25%. The Monetary Policy Committee unanimously voted to maintain a 'neutral' stance. Malhotra projected inflation to moderate further in FY26, forecasting it at 4.2% for the fiscal year. The RBI expects inflation to be 4.5% in Q1, 4% in Q2, 3.8% in Q3, and 4.2% in Q4 of FY26. The central bank also pegged India's FY26 GDP growth at 6.7%. This marks the first rate cut in nearly five years, signaling a shift towards supporting economic growth while maintaining price stability.

Source: Reserve Bank of India