RBI Repo Rate Cut to 6%: April 2025 MPC Highlights
Why in the news
The RBI’s April 2025 policy review lowered the repo rate again and signalled that further easing is possible. The stance became accommodative to back growth.
Key facts
- Repo rate: cut by 25 basis points to 6%, the second cut in a row this year.
- Stance: now accommodative.
- Governor: Sanjay Malhotra urged quick transmission of the cut through banks.
- Bond yields: fell to a 3-year low as markets read the outlook as dovish.
Forecast revisions
| Indicator | Earlier | Now |
|---|---|---|
| FY26 GDP growth | 6.7% | 6.5% |
| Inflation projection | 4.2% | 4% |
Other points
- Transmission: lending rates linked to the marginal cost of funds may adjust slowly.
- Sectors: real estate and automobiles are expected to gain, with hopes of a demand revival after weak months.
- Gold loans: a draft circular seeks uniform rules, clearer conduct standards, borrower protection and better handling of collateral.
- IndusInd Bank: the Governor called the matter an “incident, not a systemic failure”.
Significance
Calibrated cuts and softer inflation show a tilt towards growth, though global uncertainty remains a challenge.
Exam angle
- Repo rate after the April 2025 review: 6%.
- RBI Governor: Sanjay Malhotra.
- Terms: accommodative stance, rate transmission, marginal cost of funds.