RBI Slashes Repo Rate to 5.5% — Third Consecutive Cut in 2025
The RBI cuts repo rate by 50 bps to 5.5%, marking its third consecutive cut in 2025. Inflation forecast lowered to 3.7% for FY26, while GDP growth remains at 6.5%.
In its latest Monetary Policy announcement, the Reserve Bank of India (RBI) has slashed the repo rate by 50 basis points to 5.5%.
It is the third straight repo rate cut since February 2025. Since the Covid-19 era, beginning February 2020, this is the first time that the RBI MPC has implemented three consecutive rate cuts.
RBI Governor Sanjay Malhotra, after the MPC meeting, said the inflation outlook for FY26 has been revised down to 3.7% from 4%, while the GDP growth forecast remains steady at 6.5%. However, he expressed concerns over geopolitical tensions and weather-related uncertainties as ongoing risks.
With this RBI rate cut, external benchmark lending rates (EBLR)—including home loan interest rates—are expected to decrease. The repo rate cut has brought relief to borrowers.
Banks are likely to align their lending rates with the repo rate, which was also seen in February.
As seen in February 2025, banks are likely to align their lending rates with the new repo rate. Additionally, the bond market is expected to gain, as falling interest rates typically push bond prices higher.
Investors and analysts following the RBI policy closely on platforms like Moneycontrol and NASDAQ will note the emphasis on growth support amid external challenges.
Stay tuned for more updates on the RBI policy live, repo rate news, and the upcoming RBI MPC meeting
