RBI Expected to Cut Repo Rate by 25 Basis Points in April: Economists Predict Growth Support

The Reserve Bank of India (RBI) is widely expected to cut the policy repo rate by 25 basis points (bps) in its upcoming monetary policy meeting on April 9, according to a Reuters poll. This move would bring the repo rate down to 6.00%, aligning with the RBI's recent shift towards supporting economic growth amidst easing inflation.

In February, the RBI initiated a rate cut cycle by reducing the repo rate by 25 bps to 6.25%, marking the first decrease in nearly five years. This decision was driven by moderating inflation and slowing economic growth. The Consumer Price Index (CPI) inflation for February 2025 fell to a seven-month low of 3.61%, providing policymakers with room for further easing.

Economists anticipate that the RBI will continue to focus on growth support, with some predicting additional rate cuts later in the year. The central bank has been actively injecting liquidity into the banking system to ensure smoother transmission of lower rates across the economy.

The expected rate cut is seen as a positive move for borrowers, particularly those with repo-rate-linked loans, as it would lead to lower borrowing costs and potentially boost consumer spending and economic activity.

Sources: Reuters, Economic Times, Business Standard, PersonalFN.