PrashantNews
The Monetary Policy Committee (MPC), in its 54th meeting and the first of the financial year 2025–26, unanimously on Wednesday decided to reduce the policy repo rate by 25 basis points, bringing it down to 6 percent with immediate effect, it was officially announced.
The repo rate is the rate at which the Reserve Bank of India (RBI) lends money to commercial banks, and a cut in this rate is aimed at boosting lending and investment.
This decision comes at a time when global economic conditions are becoming increasingly uncertain. Trade tensions have resurfaced, leading to a decline in crude oil prices, weakening of the US dollar, softening bond yields, and corrections in equity markets. While central banks across the world are adjusting their policies to address domestic concerns, they are doing so cautiously.
The RBI has projected real GDP growth at 6.5 per cent for 2025–26, maintaining the same rate as estimated for 2024–25, following a strong expansion of 9.2 per cent in the preceding year. The quarterly projections stand at 6.5 per cent in Q1, 6.7 per cent in Q2, 6.6 per cent in Q3, and 6.3 per cent in Q4. This marks a downward revision of 20 basis points from the February estimate, reflecting heightened global volatility.
Agriculture remains on a positive footing, supported by healthy reservoir levels and robust crop production, which is expected to sustain rural demand. Manufacturing is showing early signs of revival amid improved business sentiment, and the services sector continues to demonstrate resilience.