Today is April 9, 2025, and the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) has just concluded its latest meeting with a significant announcement. The meeting, held from April 7 to April 9, saw RBI Governor Sanjay Malhotra reveal a 25 basis points (bps) cut in the repo rate, bringing it down from 6.25% to 6%. This marks the first notable rate cut in the last five years. Let’s get into the details of RBI MPC Meet updates—what happened, why it happened, and how it will impact our lives!
RBI MPC Meet Updates 2025: Overview
The RBI MPC meets every two months, and this was the first review of the financial year 2025-26. The meeting began on April 7 and concluded on April 9. This morning at 10 AM, Governor Sanjay Malhotra delivered the policy statement, which was live-streamed on RBI’s official YouTube channel. A press conference followed at noon, where he addressed media questions.
The MPC consists of six members—three from the RBI and three external experts appointed by the government. This committee decides the repo rate, inflation targets, and policies to support economic growth. This time, the focus was on tackling global economic challenges, controlling inflation, and supporting growth.
Key Announcements: Repo Rate Cut and Policy Stance
The biggest highlight is the 25 bps reduction in the repo rate. Previously set at 6.25% (following a cut from 6.5% in February 2025), it now stands at 6%. This decision was driven by controlled inflation and the need to give the economy a slight push.
Additionally, the MPC shifted its policy stance from “neutral,” set in October 2024, to “accommodative.” An accommodative stance signals that the RBI is prioritizing growth and may introduce further rate cuts or liquidity measures if needed.
Governor Malhotra stated, “Global economic conditions are challenging, the inflation outlook is benign, and growth is moderate—making it essential to support growth.”
Other Key Points of RBI Monetary Policy Committee April 2025
Inflation Forecast: The RBI projects CPI inflation for FY26 to hover around 4%, aligning with its target. In January, it was below 4.5%, while December 2024 saw it at 5.22%. Food inflation has also eased to 8.4% from 9%.
GDP Growth: Good news for the economy—GDP growth for FY26 is expected to reach 6.7%, driven by private consumption and investment.
Global Risks: Malhotra highlighted global uncertainties like US tariffs, currency depreciation, and imported inflation, which could impact India’s economy. The RBI is balancing caution with proactive measures.
What Does This Mean for the Common Person?
Now, the big question: how will this rate cut and policy shift affect our daily lives? Here’s a breakdown:
- Cheaper Loans: A lower repo rate reduces borrowing costs for banks from the RBI. If banks pass this benefit to customers, EMIs on home loans, car loans, and personal loans could decrease. So, if you’re planning to buy a house or car, this might be a good time!
- Impact on Savings: Interest rates on fixed deposits (FDs) and savings accounts may dip, as banks adjust rates in response to lower borrowing costs. This could be a downside for those relying on savings interest.
- Market Boost: Stock markets typically cheer rate cuts, as cheaper borrowing boosts company profits. The market was volatile this morning, but banking stocks showed some positivity.
- Stable Prices: Controlled inflation means the prices of goods should remain steady, which is good news for household budgets.
Also Read: With RBI Surplus Taken Away, How Safe Are Your Bank Deposits?
What Are Experts Saying?
Economists and market analysts have shared their takes on this decision:
- SBI Research: They had predicted a 25 bps cut for April 2025 and expect a cumulative 100 bps reduction in FY26.
- HDFC Bank Economist Sakshi Gupta: She believes the RBI is on a shallow rate-cut cycle, with future cuts depending on global and domestic conditions.
- BofA Securities: They note that the RBI is prioritizing growth and may introduce additional liquidity measures.
Also Read: 10 Important Facts About Reserve Bank of India You Need to Know
What’s Next?
The RBI announced that the next MPC meeting is scheduled for June 4-6, 2025. Until then, it will monitor global conditions (like the impact of US tariffs) and domestic growth-inflation data. If inflation continues to ease and growth remains sluggish, another rate cut could be on the cards.
On liquidity, the RBI reduced the Cash Reserve Ratio (CRR) by 50 bps in December 2024, injecting Rs 1.16 trillion into the system. No changes were made to the CRR this time, but Malhotra assured that the RBI would take proactive steps if needed.
Conclusion: A Balanced Approach
Overall, this RBI MPC Meet updates reflects a balanced strategy—keeping inflation in check, boosting growth, and addressing global risks. The 25 bps rate cut and accommodative stance show the RBI’s intent to provide economic relief. For you, this could mean cheaper loans but slightly lower returns on savings. Now, it’s up to banks to pass on these benefits and the market to respond.
What do you think of this decision? Did it meet your expectations, or were you hoping for something else? Share your thoughts! For the latest updates, keep an eye on RBI’s social media or news channels!
