RBI Cuts Repo Rate by 25 bps to 6% Amid Growth Concerns
Published • 9 April 2025 at 7:05 AM
RBI Cuts Repo Rate to 6% in April to Ease Borrowing and Boost Growth
The Reserve Bank of India (RBI) has cut the key repo rate by 25 basis points to 6%, aiming to stimulate economic growth and support consumer demand. The decision, taken during a three-day Monetary Policy Committee (MPC) meeting led by Governor Sanjay Malhotra, marks the second consecutive rate cut this year. With inflation falling below 4% and growth concerns rising, the RBI also shifted its policy stance from ‘neutral’ to ‘accommodative’. The Standing Deposit Facility (SDF) and Marginal Standing Facility (MSF) rates were revised to 5.75% and 6.25%, respectively. Experts say the rate cut will likely lead to lower home loan EMIs, especially for new borrowers. Existing borrowers may benefit at their loan’s next reset period, depending on their bank’s policies. The repo rate—used by RBI to lend money to commercial banks—directly influences borrowing costs across the economy. By lowering it, the central bank aims to boost spending and investment. Additionally, the RBI reduced its GDP growth forecast for FY26 to 6.5%, down from 6.7% projected earlier, citing evolving macroeconomic conditions.
Repo Rate Now 6%: RBI Moves to Stimulate Economy, Ease Loans
- RBI cuts repo rate by 25 basis points to 6% to support economic growth and consumer demand.
- The decision was made during a three-day MPC meeting led by Governor Sanjay Malhotra.
- This is the second consecutive repo rate cut in 2025.
- RBI shifted its policy stance from ‘neutral’ to ‘accommodative’ to encourage lending and investment.
- SDF rate adjusted to 5.75%, MSF rate adjusted to 6.25%.
- The move follows a drop in inflation below 4% and concerns about slowing growth.
- Home loan EMIs are expected to become cheaper, especially for new borrowers.
- Existing borrowers may see benefits during their next loan reset period.
- A lower repo rate reduces borrowing costs, encouraging banks to lower interest rates.
- RBI revised GDP growth forecast for FY26 to 6.5%, down from 6.7%.
