MUMBAI, Apr 9: The RBI on Wednesday slashed key interest rate by 25 basis points, for the second time in a row, to support a shuttering economy hit by reciprocal tariffs imposed by the US.
Following the rate cut, the key policy rate eased to 6 per cent providing relief to home, auto and corporate loan borrowers.
In its last policy in February, RBI had trimmed repo rate by 25 basis points to 6.25 per cent. This rate came after previous rate reduction in May 2020. The last revision of rates happened in February 2023 when the policy rate was hiked by 25 basis points to 6.5 per cent.
The Monetary Policy Committee (MPC) unanimously decided to slash the policy rate by 25 basis points to 6.25 per cent, RBI Governor Sanjay Malhotra said.
RBI has lowered the GDP growth forecast to 6.5 per cent from earlier projection of 6.7 per cent due to global uncertainties.
Last week, US President Donald Trump had announced a hefty 26 per cent reciprocal tariffs on Indian imports, effective April 9.
Highlights of RBI’s April 2025 monetary policy
Following are the highlights of the first bi-monthly credit policy of 2025-26 fiscal announced by Reserve Bank Governor Sanjay Malhotra after the 54th meeting of Monetary Policy Committee (MPC) on Wednesday:
* Key interest rate (repo) reduced by 25 basis points to 6 pc, lowering it for the second time in a row
* Six-member MPC unanimously votes to reduce repo rate
* Monetary stance changed to accommodative, meaning MPC to consider only two options — status quo or a rate cut
* GDP growth forecast for FY26 lowered to 6.5 pc from 6.7
* Indian economy has made steady progress towards goals of price stability, sustained growth
* RBI says trade tariff related measures have exacerbated uncertainties clouding the economic outlook across regions
* Inflation projected at 4 pc in FY26, lower from earlier estimate of 4.2
* RBI permits NPCI to raise UPI transaction limit for person-to-merchant payments
* RBI proposes to review guidelines for lending against gold jewellery
* Central bank proposes to expand scope for co-lending and issue generic regulatory framework
* Minutes of 54th MPC meeting to be published on April 23
* Next meeting of MPC is scheduled from June 4 to 6, 2025. (PTI)
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