The Reserve Bank of India (RBI) on Wednesday, April 9, announced a 25 basis point cut in the repo rate, bringing it down from 6.25% to 6.00%, in its first bi-monthly monetary policy for FY26. The decision, presented by RBI Governor Sanjay Malhotra, comes amid growing global economic concerns and moderating domestic inflation.
The Monetary Policy Committee (MPC), led by Governor Malhotra, concluded its three-day meeting today after starting deliberations on April 7. The committee’s decision aligns with widespread expectations from economists and market experts who had forecast a rate cut to help shield India’s economy from external shocks.
This move marks the second consecutive rate cut by the central bank. In February 2025, the RBI had reduced the repo rate by 25 bps to 6.25%—its first cut since May 2020, following nearly two and a half years of unchanged rates under the previous Governor, Shaktikanta Das.
The latest rate cut comes at a time when the global macroeconomic environment is facing renewed turbulence. The U.S. recently imposed a massive 104% tariff on Chinese imports, and a steep 26% reciprocal tariff on Indian goods also came into effect today, April 9. These developments have triggered fears of a slowdown in global trade, prompting central banks, including the RBI, to act swiftly.
Experts view this rate cut as a proactive measure to preserve domestic growth momentum, especially as rising global protectionism poses risks to exports, foreign investments, and broader economic stability.
Alongside the rate cut, Governor Malhotra is expected to offer an updated outlook on CPI inflation, GDP growth, liquidity, and fiscal policy coordination in his post-policy address.
With this latest move, borrowers can expect banks to lower interest rates on home, car, and personal loans in the coming weeks, providing a welcome relief to consumers and businesses alike.
