RBI Cuts Key Interest Rate by 25 Basis Points to Support Economy Amid US Tariffs
RBI Cuts Key Interest Rate by 25 Basis Points to Support Economy Amid US Tariffs
The Reserve Bank of India (RBI) has reduced the key interest rate by 25 basis points, bringing the policy rate to 6%.
The RBI (Reserve Bank of India) cut the key interest rate by 25 basis points on Wednesday. This is the second consecutive rate cut. The aim is to support the economy, which has been affected by reciprocal tariffs from the US.
Following this reduction, the key policy rate is now 6%. This offers relief to borrowers of home, auto, and corporate loans.
In its February policy meeting, the RBI had also reduced the repo rate by 25 basis points to 6.25%. This followed a previous rate cut in May 2020.
The last rate hike was in February 2023. At that time, the RBI increased the policy rate by 25 basis points to 6.5%.
RBI Governor Sanjay Malhotra announced that the Monetary Policy Committee (MPC) unanimously agreed on this rate cut. The policy rate is now 6.25%.
The RBI also revised its GDP growth forecast for the year. The new estimate is 6.5%, down from 6.7%. This revision is due to global uncertainties.
This change in the growth forecast follows US President Donald Trump’s announcement. He imposed a 26% reciprocal tariff on Indian imports, effective from April 9.
