Business desk
10 April
Sandeep Dhand
Journalist Research Analysist
The Reserve Bank of India (RBI) has reduced the key policy interest rate by 25 basis points, bringing the repo rate down to 6%. This is the second consecutive time the central bank has lowered the rate. The move is expected to provide some support to the slowing economy, which has been under pressure due to global uncertainties and recent trade tensions with the United States.
With this rate cut, loans such as home, auto, and corporate borrowings are likely to become cheaper, offering relief to millions of borrowers. The RBI had earlier cut the repo rate by 0.25% in February, reducing it from 6.5% to 6.25%. Now, with the latest cut, the rate stands at 6%, which could lead to lower EMIs for loan takers.
This decision was made during the latest meeting of the Monetary Policy Committee (MPC), where all members agreed unanimously on the rate cut. RBI Governor Sanjay Malhotra said the rate reduction is aimed at boosting demand and investment amid a challenging global environment.
The central bank also revised its GDP growth forecast for the current financial year. Earlier estimated at 6.7%, the projection has now been lowered to 6.5%. The downgrade comes in the wake of growing global tensions and uncertainty, particularly after U.S. President Donald Trump announced a 26% retaliatory tariff on Indian imports, effective April 9.
The RBI’s move signals a cautious but supportive approach to economic management, trying to balance inflation control with the need to spur growth. The interest rate cut may encourage more spending and borrowing, which could help the Indian economy recover from ongoing global headwinds.