Monetary Policy: RBI cuts repo rate, charts out path for the future

RBI Governor Sanjay Malhotra's statement explains what an accommodative monetary policy stance means it is geared towards stimulating the economy through softer interest rates

Finally, the Reserve Bank of India (RBI) has kicked off an easy-money policy regime. 

At the end of the three-day meeting of its rate-setting body, the monetary policy committee (MPC) — the first in 2025-26 (FY26) — the Indian central bank on Wednesday reduced the policy repo rate by 25 basis points (bps) to 6 per cent. One basis point is a hundredth of a percentage point. 

This was the second successive rate cut since February. More important than the rate cut is the change in the monetary policy stance – from ‘neutral’ to ‘accommodative’. Both decisions of the six-member