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Date: 09-apr-2025
In a key monetary policy decision on April 9, 2025, the Reserve Bank of India (RBI) announced a 25 basis points reduction in the repo rate, bringing it down to 6.00%. This marks the second consecutive rate cut following February’s easing, as the RBI continues its effort to shield India’s economy from mounting global trade tensions and domestic slowdowns.
The central bank’s Monetary Policy Committee (MPC) also voted unanimously to shift its stance from ‘neutral’ to ‘accommodative’, a move that signals the RBI’s intent to support growth while keeping inflation in check.
As part of the policy update, the RBI revised its GDP growth projection for FY26 to 6.5%, down from the previous estimate of 6.7%. This reflects growing concern over the economic impact of the recently announced 26% U.S. tariffs on Indian imports, which are expected to dampen export competitiveness and manufacturing sentiment.
On the inflation front, the central bank lowered its forecast for FY26 to 4.0%, citing softer food prices and stable fuel costs. However, it warned of potential volatility due to global uncertainties and weather-related agricultural disruptions.
The RBI’s move comes amid increased global financial stress, trade protectionism, and weakening demand. The U.S. government’s tariff actions against India and China have shaken export markets, prompting central banks globally to adopt supportive measures.
“The MPC remains focused on aligning inflation with the target while supporting growth amid evolving global conditions,” RBI Governor Shaktikanta Das said during the announcement.
Financial markets showed a mildly positive response following the rate cut. The Sensex and Nifty recovered slightly after a weak opening, as investors welcomed the RBI’s proactive stance. Banking and auto stocks saw a marginal uptick in anticipation of cheaper credit and improved liquidity.
With an accommodative stance now in place, analysts expect the RBI to remain flexible in its future policy decisions. As global and domestic challenges evolve, including geopolitical risks, supply chain disruptions, and monsoon developments, monetary policy will continue to play a critical role in maintaining macroeconomic stability.
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Date: 09-Apr-2025
Indian stock market gains on April 9, 2025, led by Power Grid and FMCG stocks. IT and pharma weigh down market ahead of RBI’s policy verdict.
Date: 09-Apr-2025
Indian stock market gains on April 9, 2025, led by Power Grid and FMCG stocks. IT and pharma weigh down market ahead of RBI’s policy verdict.
