Overview

• The Reserve Bank of India reduced the policy repo rate by 25 basis points to 6%, marking the second consecutive cut this year.
• The central bank shifted its monetary policy stance from 'neutral' to 'accommodative,' signaling openness to further rate reductions if needed.
• Public sector banks, including Bank of India, UCO Bank, and Bank of Baroda, immediately passed on the rate cut by lowering lending rates for retail and MSME segments.
• The RBI revised its growth projection for FY26 to 6.5% and inflation forecast to 4%, reflecting ongoing global trade challenges and domestic pressures.
• Economists predict additional rate cuts in 2025, with some projecting a cumulative reduction of up to 100 basis points as growth risks persist.