The Reserve Bank of India (RBI) reduced the repo rate (RR) by 25 basis points to 6% on Wednesday, April 9. The announcement was made after the decision was taken at the RBI Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra. The MPC meeting began on March 7 and concluded today after the big relief decision for middle-class people.
This is the RBI's second rate cut in a row, following the 25 basis point reduction it made in February. The move comes at a time when inflation has dropped below 4% and there are growing concerns over slower economic growth amid the world's tariff war. The central bank has taken this step to support demand and boost investment.
"The MPC (Monetary Policy Committee) voted unanimously to reduce the policy repo rate by 25 basis points to 6 % per cent with immediate effect," said RBI Governor Sanjay Malhotra.
RBI Governor said uncertainty depended on by investment and spending of businesses and households. ""First and foremost, uncertainty in itself dampens growth by affecting investment and spending decisions both of businesses and households." He said that the tariffs imposed will have negative impact on next exports. "Second, the dent on global growth due to trade frictions will also impede domestic growth. Third, higher tariffs shall have a negative impact on net exports. The impact of relative tariffs, our relative tariffs vis some of the other countries are quite low."
The assured that India is in contact with the US administration regarding the foreign trade. "Then there is the unknown of the elasticities of our export and import demand and the policy measures adopted by us. India is very vigorously and proactively engaging with the US administration on the foreign trade agreement..."
“We welcome the RBI’s decision to cut the repo rate by 25 basis points to 6%. This timely move signals the central bank’s commitment to stimulating economic growth while balancing inflationary pressures. This cut translates to improved home loan affordability and renewed buyer sentiment for the real estate sector, which is closely aligned with interest rate movements. At a time when consumers are increasingly seeking value-driven investments, this rate revision could provide much-needed momentum to residential and affordable housing segments. While the stance change may not directly target liquidity, we believe this measured approach creates a conducive environment for sustainable growth in both demand and supply. We anticipate a positive cascading effect across allied industries and urge financial institutions to pass on the benefits swiftly. This is a welcome boost for homebuyers and developers alike.” said Rahul Singla, Director of Mapsko Group