RBI cuts repo rate to 6.25%, first time in 5 years

By
Ziraat Times
-

New Delhi: The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) has decided to revise the repo rate for the first time in two years, reducing it by 25 basis points to 6.25 per cent from 6.5 per cent, Governor Sanjay Malhotra announced on Friday. During the meeting, which took place between February 5 and 7, MPC members unanimously voted to cut the repo rate. 

The standing deposit facility (SDF) rate has also been adjusted to 6 per cent from 6.25 per cent, while the marginal standing facility (MSF) rate and the bank rate has been adjusted to 6.5 per cent from 6.75 per cent, the governor said.

The RBI MPC has also decided unanimously to continue with its ‘neutral’ stance and remain “unambiguously focused on a durable alignment of inflation with the target while supporting growth”. 

The RBI governor explained that the rationale behind this decision as that the MPC had noted a decline in inflation due to favorable outlook on food prices and continuing transmission of previous RBI monetary policy actions.

“It is expected to further moderate in 2025-25, gradually aligning with the target,” Malhotra said.

Gross domestic product (GDP) forecast for financial year 2025-26 (FY26) has been pegged at 6.7 per cent.

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