RBI Repo Rate Cut to 6% and Accommodative Stance
Why in the news
Governor Sanjay Malhotra announced a second successive repo cut and a change to an accommodative stance, signalling lower borrowing costs for households and firms.
Key facts
- Repo rate: 6.25% to 6.00%, a cut of 25 bps.
- Stance: neutral to accommodative; the Governor said the only likely actions ahead are a cut or no change, unless a big shock hits.
- GDP forecast FY26: reduced by 20 bps to 6.5%.
- Inflation forecast FY26: 4%, helped by cheaper food and crude near $60 a barrel.
- Liquidity: surplus kept at about 1% of deposits (around ₹2.3 lakh crore), against ₹1.5 lakh crore at present.
Policy snapshot
| Parameter | Before | After / forecast |
|---|---|---|
| Repo rate | 6.25% | 6.00% |
| Stance | Neutral | Accommodative |
| GDP growth FY26 | Trimmed by 20 bps | 6.5% |
| Surplus liquidity | ₹1.5 lakh crore | About ₹2.3 lakh crore |
About the repo rate
- It is the benchmark rate at which the RBI lends to commercial banks.
- A cut tends to lower lending rates, encouraging credit, consumption and investment.
Implications
- Lower EMIs on home, car and personal loans if banks pass on the cut.
- Positive for real estate, auto and consumer durables.
- Trade tensions and tariffs make the growth outlook more cautious; RBI stays alert to food-supply risks from heatwaves and a shaky monsoon.
Exam angle
- RBI Governor: Sanjay Malhotra.
- Terms: repo rate, accommodative stance, basis point, surplus liquidity.