Significant changes have been made by the Reserve Bank of India (RBI) in its most recent monetary policy rulings. The repo rates were lowered by 25 basis points to 6.25%, in line with what the market anticipated. The policy position is still neutral and places a strong emphasis on financial stability.
With a detailed breakdown of goals for every quarter, the RBI projects a GDP growth rate of 6.7% for FY26. Targets for inflation have also been established, with a lower aim of 4.2% for FY26 and a higher objective of 4.8% for FY25.
Governor Sanjay Malhotra emphasized how inflation is in line with the goals, demonstrating a calculated approach to managing the economy. This action comes after a string of meetings in which the benchmark repo rate held unchanged at 6.5%, demonstrating the cautious stance adopted in the face of economic uncertainty.
After a protracted period of rate stability—the last drop was in May 2020—this rate cut represents a dramatic shift. The RBI’s proactive approach to tackling economic issues and striking a balance between growth and inflation concerns is reflected in the decision.
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