RBI Reduces Repo Rate by 0.25%
The Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points from 5.50% to 5.25% following a three-day meeting of the Monetary Policy Committee (MPC). This marks the fourth rate cut in 2025, with a cumulative reduction of 1.25% from 6.50% in February 2025. Despite the cut, the MPC has retained its “Neutral” policy stance, signalling a data-dependent approach ahead.
The decision was supported by historic low inflation and strong economic growth. The CPI inflation forecast for FY 2025–26 was reduced to 2.0% from the earlier 2.6%, comfortably below the RBI’s medium-term target of 4% (±2%). Meanwhile, real GDP growth for FY 2025–26 was revised upward to 7.3% from 6.8%, and Q2
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