Quote on Post RBI Monetary Policy by Mr. Ajit Mishra - SVP, Research, Religare Broking Ltd
Below the Quote on Post RBI Monetary Policy by Mr. Ajit Mishra - SVP, Research, Religare Broking Ltd
"The Reserve Bank of India, in its monetary policy meeting held on April 9, 2025, announced a series of proactive steps aimed at supporting economic growth amid mounting global uncertainties and subdued inflation. The Monetary Policy Committee (MPC) unanimously decided to reduce the repo rate by 25 basis points, lowering it from 6.25% to 6.00%. Alongside the rate cut, the policy stance was shifted from neutral to accommodative, signaling the central bank’s readiness to ease further if required. This shift narrows future options to either maintaining the current rate or implementing additional cuts, depending on evolving economic conditions.
In addition to the repo rate, other key policy rates were also revised. The standing deposit facility (SDF) rate was lowered to 5.75%, while both the marginal standing facility (MSF) and the bank rate were set at 6.25%. The RBI also revised its macroeconomic outlook—bringing down the inflation forecast for FY26 to 4%, and trimming the GDP growth projection from 6.7% to 6.5%, reflecting the challenges posed by the global economic environment.
This decision comes on the back of a sustained moderation in retail inflation. In February 2025, the Consumer Price Index (CPI) fell to 3.61%, well within the central bank’s target band of 4% ± 2%. The drop in inflation has created the necessary space for monetary easing, with the latest rate cut expected to reduce borrowing costs for both households and businesses, thereby aiding credit growth and demand revival.
Overall, the RBI’s latest policy measures are aimed at preserving long-term macroeconomic stability while addressing near-term risks. By enhancing liquidity and reducing interest rates, the central bank seeks to support domestic momentum, counterbalance external shocks such as global trade disruptions and U.S. tariff actions, and create a more conducive environment for sustainable economic growth."
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