The Reserve Bank of India (RBI) on Wednesday, April 9, announced a 25 basis point reduction in the repo rate, lowering it from 6.25% to 6.00%. This move, part of the first bi-monthly monetary policy for FY26, was presented by RBI Governor Sanjay Malhotra and comes against the backdrop of global economic uncertainty and easing domestic inflation.
The Monetary Policy Committee (MPC), headed by Governor Sanjay Malhotra, wrapped up its three-day meeting today, which began on April 7. The decision to cut the repo rate aligns with expectations from economists and market experts, who had anticipated the move to cushion India’s economy against global uncertainties.
This marks the RBI’s second consecutive rate cut. In February 2025, the central bank had lowered the repo rate by 25 basis points to 6.25%—its first cut since May 2020—after keeping rates unchanged for nearly two and a half years under former Governor Shaktikanta Das.
The latest rate cut comes amid rising global economic uncertainty. The U.S. recently imposed a steep 104% tariff on Chinese imports, while a 26% reciprocal tariff on Indian goods also took effect today, April 9. These moves have raised concerns over a slowdown in global trade, prompting central banks like the RBI to respond proactively.
Experts see the rate cut as a proactive step to sustain domestic growth, particularly as increasing global protectionism threatens exports, foreign investments, and overall economic stability.
Along with the rate cut, Governor Malhotra is set to share updated projections on CPI inflation, GDP growth, liquidity, and fiscal policy coordination in his post-policy address. The move is also likely to lead to lower interest rates on home, car, and personal loans in the coming weeks, offering much-needed relief to consumers and businesses.
