MUMBAI: The Reserve Bank of India (RBI) cut its key repo rate on Wednesday for a second consecutive time and changed its monetary policy stance to “accommodative” from “neutral” to boost the sluggish economy, which is facing further pressure from U.S. tariffs.
As expected, the Monetary Policy Committee (MPC), which consists of three RBI and three external members, cut the repo rate by 25 basis points to 6.00%. It started reducing rates with a quarter-point reduction in February, its first cut since May 2020.
All six MPC members voted to cut the repo rate.
The new U.S. tariffs on India threaten the central bank’s GDP growth estimate of 6.7% for 2025-26 and the government’s economic survey forecast of 6.3%-6.8%.
Inflation, on the other hand, dropped to 3.6% in February, below the central bank’s target of 4%, and is seen holding around those levels, giving policymakers more manoeuvring room.
