RBI Cuts Repo Rate to 6% in April 2025 Monetary Policy Review
On April 9, 2025, the Reserve Bank of India’s Monetary Policy Committee (MPC) unanimously cut the policy repo rate by 25 basis points to 6%, marking the second consecutive rate reduction this year. The Standing Deposit Facility (SDF) was adjusted to 5.75%, while the Marginal Standing Facility (MSF) and Bank Rate were set at 6.25%.
The MPC also shifted its policy stance from neutral to accommodative, citing evolving economic conditions and the need for close monitoring. RBI Governor Sanjay Malhotra mentioned that unless shocks arise, the committee will consider either maintaining rates or further cuts in future.
Inflation data showed food inflation dropped to a 21-month low of 3.8% in February 2025, while core inflation rose to 4.1%, driven by higher gold prices. The RBI projects CPI inflation at 4% for 2025–26, noting positive signs like falling crude oil prices, but also warning of risks from global uncertainties and weather-related disruptions.
The Governor also addressed global trade tensions, including tariff uncertainties, which he said could hurt both global and domestic growth, though exact impacts are hard to quantify. He added that all central banks are adopting a cautious approach due to weakening US dollar, lower bond yields, and falling oil prices.
The next MPC meeting is scheduled for June 4–6, 2025.
