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Informist, Wednesday, Apr. 9, 2025

 

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--RBI Malhotra: MPC voted unanimously to cut repo rate by 25 bps to 6.00%
--RBI Malhotra: SDF rate adjusted to 5.75% 
--RBI Malhotra: MPC changed stance to accommodative 
--RBI Malhotra: Policy stance has been subject of plenty of commentary 
--RBI Malhotra: Our stance signals intended policy direction 
--RBI Malhotra: Policy stance should not be linked with liquidity conditions 
--RBI Malhotra: Stance means MPC only considering status quo or rate cut 
--RBI Malhotra: Stance change to not be associated with liquidity conditions 
--RBI Policy: Minutes of Apr MPC meeting to be released on Apr 23 
 

 

NEW DELHI - The Reserve Bank of India's Monetary Policy Committee has lowered the policy repo rate by 25 basis points to 6.00% in a unanimous decision, the central bank's Governor Sanjay Malhotra said Wednesday. The committee also unanimously voted to change the policy stance to 'accommodative' from 'neutral', which was adopted in October.

 

The rate-setting panel's decision was in line with expectations. In an Informist poll, all 15 economists had expected the MPC to lower the repo rate by 25 bps from 6.25%. Some economists had also said the MPC could change the stance to 'accommodative' in this meeting.

 

This is the second consecutive meeting in which the MPC has lowered the repo rate. The committee had cut the repo rate by 25 bps to 6.25% in February, when it eased rates for the first time in nearly five years. 

 

"The domestic growth-inflation trajectory demands monetary policy to be growth supportive, while being watchful on the inflation front," Malhotra said in his statement. "We are aiming for a non-inflationary growth that is built on the foundations of an improved demand and supply response and sustained macroeconomic balance."

 

Malhotra said the monetary policy stance signals the intended direction of policy rates going forward. "Accordingly, with respect to the policy rate, which is the mandate of the MPC, today's change in stance from 'neutral' to 'accommodative' means that going forward, absent any shocks, the MPC is considering only two options – status quo or a rate cut," the governor said. 

 

The governor said the policy stance should not be directly associated with liquidity conditions. "Our stance provides policy rate guidance, without any direct guidance on liquidity management," he said. 

 

The RBI lowered its GDP growth forecast for 2025-26 (Apr-Mar) by 20 basis points to 6.5%, while the CPI inflation projection for the current fiscal was also changed to 4.0% from 4.2?rlier. Malhotra said the downward revision in growth forecast essentially reflects the impact of global trade and policy uncertainties.

 

With the repo rate lowered to 6.00%, the Standing Deposit Facility rate comes down to 5.75%, while the Marginal Standing Facility and bank rates now stand at 6.25%.

 

The minutes of the April MPC meeting will be published on Apr. 23. The next meeting of the MPC is scheduled for Jun 4-6.   End

 

Reported by Shubham Rana

Edited by Tanima Banerjee

 

 

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