The Reserve Bank of India (RBI) on Wednesday, April 9, announced a 25 basis point cut in the repo rate, reducing it from 6.25% to 6.00%, effective immediately. The decision was made during the first bi-monthly Monetary Policy Committee (MPC) meeting of FY26, and comes against the backdrop of intensifying global trade tensions and moderating domestic inflation.
The six-member MPC, chaired by RBI Governor Sanjay Malhotra, voted unanimously for the repo rate reduction. Alongside the repo rate cut, the RBI also reduced the Standing Deposit Facility (SDF) rate to 5.75% and the Marginal Standing Facility (MSF) rate to 6.25%.
The three-day policy meet, which began on April 7, concluded today with the central bank aligning its stance to balance domestic growth concerns with rising global risks. This marks the second consecutive rate cut, following the February 2025 reduction which brought the repo rate down to 6.25%—the first cut since May 2020, after a prolonged pause during former Governor Shaktikanta Das’s tenure.
The latest decision comes amid heightened uncertainty in global markets. The United States has slapped a 104% tariff on Chinese imports, and a 26% reciprocal tariff on Indian goods came into effect today. These moves are expected to weigh heavily on global trade, investment flows, and India’s GDP, potentially shaving off 20–40 basis points in FY26.
In this context, the RBI’s easing policy is being seen as a timely intervention to support growth and liquidity. Economists believe the rate cut will encourage banks to reduce lending rates, thereby lowering EMIs on home, auto, and personal loans and stimulating consumer demand.
Governor Malhotra is expected to elaborate on the central bank’s updated stance on CPI inflation, GDP growth projections, liquidity conditions, and external macroeconomic risks in his post-policy address.
As domestic inflation remains largely stable and growth risks intensify from abroad, today’s move reinforces the RBI’s commitment to navigating a complex global financial environment while prioritizing India’s macroeconomic stability.
