The Reserve Bank of Indias (RBI) six-member Monetary Policy Committee (MPC) Friday cut the repo rate the rate at which the RBI lends to other banks by 25 basis points to 6.25 per cent, after keeping it unchanged for two years. This is the first rate cut initiated by the RBI in five years, the last one being in May 2020. RBI however continues with the neutral monetary policy stance and remain unambiguously focussed on a durable alignment of inflation with the target, while supporting growth. The decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth, the central bank noted. This was the first RBI policy under the new Governor Sanjay Malhotra and also the first RBI MPC meeting after the Union Budget 2025-2026 was presented on February 1.
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