Mumbai, April 7, 2025: The Reserve Bank of India (RBI) is set to kick off its first monetary policy review for the new fiscal year today. Financial markets and economists are closely monitoring the review, which is expected to include important decisions aimed at boosting economic growth. One of the key expectations is a potential reduction in the repo rate.
Market experts forecast that the RBI’s Monetary Policy Committee (MPC) will likely announce a 0.25% reduction in the repo rate. This move is anticipated to provide much-needed to the economy amidst growing global uncertainties. The recent trade tensions, particularly the new tariffs imposed by the United States on several countries, including China, have heightened concerns about the global economic outlook, with some fearing a slowdown in global trade. This, in turn, is creating added pressure on central banks to adopt measures that stimulate growth.
A repo rate cut is widely viewed as a means to reduce borrowing costs, which could encourage both businesses and consumers to borrow and spend more. This would help boost investments, consumption, and overall economic activity. Currently, the repo rate stands at 6.25%, and a reduction would make loans cheaper, thus fostering economic activity at a time when global trade has been impacted.
The review follows the RBI’s decision in February 2025, when it reduced the repo rate by 0.25%. At that time, the central bank aimed to counteract economic slowdown while ensuring that inflation remained under control. With the ongoing concerns about sluggish global growth and inflationary pressures, many analysts believe that the RBI will opt for another rate reduction to safeguard India’s growth trajectory.
The 54th meeting of the RBI’s Monetary Policy Committee is crucial for determining the country’s monetary policy direction in the coming months. On April 9, RBI Governor Sanjaya Malhotra will announce the committee’s decision, providing clarity on the policy outlook for the Indian economy.
The decision to reduce the repo rate, if implemented, could have significant implications on inflation, consumer behavior, and overall market confidence. While the global economic environment remains uncertain, a proactive stance by the RBI is seen as necessary to ensure that India continues to see stable growth despite external challenges.
