RBI MPC Highlights: From Repo Rate Cut To CPI Inflation Projection; Check Details Here

In the last MPC meeting in February, the committee’s actions laid the groundwork for a more accommodative policy stance and reduced the repo rate by 25 basis points

These decisions were announced following the RBI’s first monetary policy review for the financial year 2025-26, held from Monday to Wednesday

Source : PTI

The Reserve Bank of India (RBI), under the leadership of Governor Sanjay Malhotra, announced a 25 basis point reduction in the repo rate, bringing it down to 6 per cent from 6.25 per cent on Wednesday. Additionally, the central bank shifted its policy stance from "neutral" to "accommodative." 

These decisions were announced following the RBI’s first monetary policy review for the financial year 2025-26, held from Monday to Wednesday.

In the last MPC meeting in February, the committee’s actions laid the groundwork for a more accommodative policy stance and reduced the repo rate by 25 basis points. As the Indian economy faces weaker growth, it was expected that the RBI would continue adjusting its policies to promote stability.

Highlights From RBI MPC Announcements

• A 25 basis point reduction in the repo rate to 6 per cent.
  
• A shift in the policy stance from "neutral" to "accommodative."
  
• The Marginal Standing Facility (MSF) rate is adjusted to 6.25 per cent.
  
• The RBI now projects real GDP growth of 6.5 per cent for FY26. The RBI governor said that the central bank remains alert to emerging global developments.
• Inflation is currently below the target, aided by a sharp drop in food prices, with an improved inflation outlook. Inflation for FY26 is forecasted at 4 per cent, revised down from 4.2 per cent in February. For the four quarters of FY26, inflation is projected to be 3.6 per cent in Q1, 3.9 per cent in Q2, 3.8 per cent in Q3, and 4.4 per cent in Q4, with risks evenly balanced.
  
• The foreign exchange reserves stood at $676.3 billion as of April 4, 2025, providing an import cover of 11 months.
• India’s services exports remained resilient in January-February 2025, driven by software, business, and transportation services. Going forward, net services and remittance receipts are expected to remain in large surplus, partly offsetting the trade deficit, the governor said.

February RBI MPC Meeting

In the February MPC meeting, the committee had also cut the repo rate by 25 basis points to 6.25 per cent, marking the first reduction in about five years. This move signaled the RBI’s shift toward supporting growth amid a slowing economy. The committee also decided to maintain a "neutral" stance, providing flexibility for future adjustments. Additionally, a 50 basis point reduction in the Cash Reserve Ratio (CRR) to 4 per cent was announced to enhance liquidity and support credit growth.

The RBI projected India’s GDP growth for FY24-25 at 7.2 per cent, slightly above the Economic Survey's estimate of 6.4 per cent, with expectations that inflation would remain under control.