RBI MPC April 2025: Repo Rate Cut by 25 bps, Accommodative Stance
Why in the news
The Reserve Bank of India’s MPC trimmed the repo rate again in April 2025 and moved to an accommodative stance to support growth.
Key facts
- Repo rate: cut of 25 bps, continuing the easing begun in February.
- Stance: accommodative, changed from neutral.
- Inflation: Governor Sanjay Malhotra called the outlook benign, with CPI inflation near the 4% target in FY2025-26, leaving room for further easing.
- Growth: 6.5% projected for FY2025-26; India is the fastest-growing major economy but growth is below aspirations.
Rationale
- Lower rates are meant to lift private consumption and corporate investment.
- Favourable factors are outweighing risks, driving disinflation in headline CPI.
Global risks
- Members flagged worries over trade wars and US tariffs.
- Domestic demand-led growth gives some protection.
- Softer crude oil and commodity prices could bring positive spillovers.
Exam angle
- Cut: 25 bps; stance: accommodative; RBI Governor: Sanjay Malhotra.
- CPI target: 4%; GDP forecast for FY26: 6.5%.