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RBI Monetary Policy 2025: RBI Repo Rate Cut in MPC Meeting
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The Reserve Bank of India (RBI) cuts a repo rate today in the RBI Monetary Policy 2025 on 09 Apr 2025. This decision came after the RBI MPC meeting with RBI Governor Sanjay Malhotra aiming to achieve economic growth while containing inflation levels.
RBI MPC Meeting 2025: Key Highlights
In the MPC meeting today, the repo rate was lowered by 25 basis points by the Monetary Policy Committee, and now the RBI monetary policy repo rate is 6%. This is the second rate cut in a year, and it signals a shift towards an accommodating stance.
(Source: TOI)
What is Repo Rate?
The rate at which the Central Banks lend money to commercial banks is the Repo rate. A cut in the repo rate normally leads to decreased interest rates for borrowers.
Main Outcomes Achieved:
Repo Rate: Decreased to 6%.
Stance: Accommodative
CPI Inflation Projection: Slightly revised downward owing to food price disinflation
Why did RBI Decide to Cut the Repo Rate?
In the month of February of 2025, the repo rate was cut after 5 years, Now in a row, RBI Governor Sanjay Malhotra in the MPC meeting cut the rate to boost growth while reducing inflation.
Impact of Reduced Repo Rate Amid US Tariff
US Tariff Impact: Economists expect further rate cuts in repo rate in upcoming months to counter the Tariff hike imposed on India by 26% by the US.
RBI Monetary Policy Next Date
As per the calendar released by the RBI, the next RBI policy date is noted as follows:
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June 4 - June 6, 2025
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August 5 - August 7, 2025
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September 29 - October 1, 2025.
Why Rate Cuts Fail to Lift the Nifty 50
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Still Global Uncertainty
US has imposed a tariff of 26% on India's exports. Recently announced "reciprocal tariff" was to pay back the states for the effects incurred during the Trump administration, with that of its actual showing now.
Not just the US has also slapped tariffs on China. Recently, the US has announced a 104% tariff on Chinese EVs. Can one imagine imposing such a levy over 100% tax on a product, the effect will effectively kick it out of the domestic market.
It hurts the export sector directly in the case of India, 26%. Net exports go down, which translates into a negative impact on GDP.
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Already Priced In
The market was entirely expecting an initiative from the RBI, and in fact, a cut in rates had already been a baseless rumor and was confirmed finally.
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Beyond Economic Considerations
Even with interest rates lessened, in the absence of improvement in demand or universal slowdown, growth could be hampered. Projections from even the RBI display cautionary optimism are GDP at 6.5% for FY26, down from earlier expectation of 7.2%.
With all these concerns Nifty 50 showed no interest to gain today.
What to Expect in the Next RBI Monetary Policy?
These changes appear to be made for the purpose of an evolving currency stream and its inflation results (accommodative stance). As for the date for the next RBI policy meeting, it could be the turning point decision that’s capable of bridging continuing economic challenges. Here are some factors that will play a major role in the sharp decision change:
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Regional inflation pattern (domestic)
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Crude oil pricing
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Market interest rate
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Political scenarios around the country
Conclusion
‘RBI monetary policy 2025’ has come at a time when India with other Nations is facing Tariff impact on the Trade. To counter this impact this rate cut is seen as significantly important for growth.
Other Related Blogs
- In Feb 2025 the repo rate was cut after 5 years
- US Tariff Impact on India.
- The Reciprocal Tariff of 26% is pushed on India by Trump
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Frequently Asked Questions
The RBI cut the repo rate by 25 basis points to 6% to boost economic growth, support credit demand, and counter inflationary pressures. The decision also aims to soften the impact of the recent 26% US tariff on Indian exports and encourage domestic economic activity.
A repo rate reduction typically leads to lower interest rates on floating-rate home loans, personal loans, and car loans. Borrowers may see reduced EMIs as banks will pass on rate cuts gradually through MCLR and external benchmark-linked lending rates.
Nifty 50 remained flat because global uncertainty, high US tariffs, and a slowdown in export demand overshadowed the positive rate cut news. Markets had already priced in the expected MPC decision, and weak global cues prevented a rally.
The 26% US tariff on Indian exports increases pressure on India’s trade sector, reducing net exports and affecting GDP growth. This external shock pushed the RBI toward a growth-supportive stance, prompting the repo rate cut to stimulate domestic demand.
According to the RBI’s 2025 Monetary Policy Calendar, the next policy meetings are scheduled for:
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June 4–6, 2025
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August 5–7, 2025
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September 29–October 1, 2025
These meetings may see further rate adjustments depending on inflation trends, crude oil prices, domestic demand, and global economic conditions.
