On Wednesday, April 9, the Reserve Bank of India (RBI) cut the repo rate by 25 basis points, to 6%.
The Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, made the decision after a three-day meeting. All members supported the move.
Along with the rate cut, the RBI's stance shifted from 'neutral' to 'accommodative', indicating that additional support could be provided if necessary.
The Standing Deposit Facility (SDF) rate is now 5.75%, and the Marginal Standing Facility (MSF) rate is 6.25%.
Global concerns on RBI's radarGovernor Malhotra stated that the RBI is closely monitoring global developments, particularly after the US imposed new tariffs on Indian goods.
He stated that "higher tariffs shall have a negative impact on net exports," and that trade frictions will stifle global growth, which will affect India.
Growth and inflation forecastsIndia's real GDP for FY26 is now projected to be 6.5%. The quarterly breakdown is as follows:
Q1: 6.5%
Q2: 6.7%
Q3: 6.6%
Q4: 6.3%
The overall growth forecast for this fiscal year has been reduced by 20 basis points due to global trade and policy uncertainty.
The RBI expects inflation to remain at 4%, with risks viewed as evenly balanced. The central bank predicts that El Niño will not occur this year, resulting in stable monsoon conditions and food prices.
