RBI April 2025 Monetary Policy: Repo rate slashed by 25 bps to 6%; stance changed to 'accommodative'

RBI April 2025 Monetary Policy: The Reserve Bank of India (RBI) on expected lines amid growth concerns in the wake of trade tariff turmoil unanimously voted to slash key policy repo rate by 25 bps to 6 per cent. The repo rate is the interest rate at which central bank lends money to commercial banks in the country.

Also on anticipated lines, policymakers unanimously voted to change the stance to 'accommodative' from the previous 'neutral'.

"Our stance provides policy rate guidance without any direct guidance on liquidity management," says Malhotra.

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The recent trade tariff has exacerbated global uncertainty, said RBI governor Sanjay Malhotra on the sidelines of the announcements.

Also Read: RBI MPC April 7-9 Review: Will Sanjay Malhotra announce a rate cut amidst Trump tariff turmoil? 3 things to track

GDP projection

Amid policy as well as trade uncertainties, the apex lender has lowered growth projections by 20 basis points with GDP forecast at 6.5 per cent for FY26. Likewise, for the first quarter, GDP is pegged at 6.5 per cent, while for Q2 and Q3 it is pegged at 6.7 per cent and 6.6 per cent, respectively. Furthermore, for the last quarter it is estimated at 6.3 per cent.

Inflation forecast

"On inflation front, while sharper than expected decline in food prices has given us comfort, we remain vigilant to possible risks from global ucertainty and weather disruptions. MPC noted that inflation below the target currently, supported by huge fall in food prices. Moreover, there is decisive improvement in inflation outlook. As per projections, there is now greater confidence of durable alignment of headline inflation with target of 4% ov 12 months horizon," Sanjay Malhotra said in his address.

CPI inflation for FY25-26 is lowered from the earlier 4.2 per cent to 4 per cent. Further for Q1, Q2, Q3 and Q4 it is pegged at 4.5 per cent, 4 per cent, 3.8 per cent and 4.2 per cent.