RBI's policy measure to sustain growth, facilitate pvt invest, says fin secy
This story was originally published at 12:19 IST on 6 June 2025
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--TV: Fin secy: RBI rate cut to facilitate private investment
--TV: Fin secy: RBI rate cut to help sustain growth momentum
NEW DELHI – The Reserve Bank of India's policy measures announced Friday will sustain growth and facilitate private investment in the country, Finance Secretary Ajay Seth Friday said. The RBI cut the policy repo rate by 50 basis points to 5.5%, and changed stance to 'neutral' from 'accommodative'.
"These (measures) will help in enriching and sustaining the growth momentum, and facilitate private investment," Seth told Informist. The RBI's decision comes after the National Statistics Office's data showed that the GDP grew 6.5% in 2024-25 (Apr-Mar), slowest in four years. For FY26, the central bank has projected a GDP growth of 6.5%.
The RBI also cut the Cash Reserve Ratio by 100 bps to 3.00% of net demand and time liabilities, in four tranches.
This is the third consecutive meeting in which the MPC has lowered the repo rate. The committee started lowering interest rates in February with a 25-bps cut, followed by another 25-bps cut in April. Friday's decision brings the cumulative interest rate easing in 2025 to 100 bps. The decision to lower the repo rate by 50 bps was not unanimous, as external member Saugata Bhattacharya voted for a 25-bps reduction in the key rate.
With the MPC reducing the repo rate by 100 bps in quick succession since February, RBI Governor Sanjay Malhotra said there was limited space to support growth. "Hence, the MPC also decided to change the stance from accommodative to neutral," he said. End
Reported by Kuldeep Singh and Krity Ambey
Edited by Akul Nishant Akhoury
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