Why RBI cut repo rate by 25 basis points to support GDP growth

The RBI MPC unanimously decided to cut the key policy repo rate by 25 basis points to 6% and change the stance from neutral to accommodative, citing risks to India’s GDP growth and a benign inflation outlook. Governor Sanjay Malhotra highlighted the impact of global economic uncertainties, such as the recent trade tariffs, on India’s growth trajectory, emphasizing the need for a growth-supportive monetary policy. The MPC aims to achieve non-inflationary growth through clear, consistent, and credible policies that benefit the economy, amidst a challenging global economic environment.

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