Overview
- The Reserve Bank of India has cut the repo rate twice in 2025, now at 6%, and shifted to an accommodative policy stance to support economic growth.
- Monetary Policy Committee member Saugata Bhattacharya emphasized the need for calibrated easing to prevent inflationary pressures as growth nears potential levels.
- The RBI has infused ₹6.21 trillion in liquidity this year and plans a ₹1.25 trillion bond purchase in May to lower interbank funding costs.
- India's GDP growth forecast for the current fiscal year has been revised down to 6.5% from 6.7%, reflecting global trade uncertainties, including U.S. tariff policy shifts.
- An accelerated transmission of rate cuts to consumer loans is expected over the next two quarters, with most bank loans now tied to external benchmarks.