India Lowers Policy Rates By 25 Bps; Shifts Stance To Accommodative

(RTTNews) - The Reserve Bank of India reduced its key policy rates for the second straight meeting on Wednesday, and also changed its monetary policy stance to accommodative.

At the first policy meeting of the financial year, the committee governed by Sanjay Malhotra unanimously decided to cut the policy repo rate by 25 basis points to 6.00 percent, with immediate effect. The bank had previously cut its policy rate by 25 basis points in February, which was the first reduction since May 2020.

Today, the committee also decided to change the stance from neutral to accommodative. "However, it noted that the rapidly evolving situation requires continuous monitoring and assessment of the economic outlook," the bank said.

Policymakers observed that the recent trade tariff related measures exacerbated uncertainties clouding the economic outlook across regions and pose new headwinds for global growth and inflation.

The RBI downgraded India's economic growth outlook for FY25-26 to 6.5 percent from 6.7 percent. Likewise, inflation projection for the current financial year was lowered to 4.0 percent from 4.2 percent.