India central bank cuts rates for the first time in nearly five years, forecasts faster growth next year

The Reserve Bank of India cut key interest rates for the first time in nearly five years, lowering the repo rate by 25 basis points to 6.25% to stimulate the economy amid cooling inflation. The central bank projected real GDP growth at 6.7% for the fiscal year of 2026, while keeping the policy stance “neutral” despite expectations of a shift to “accommodative.” Indian stocks fell, and 10-year bond yields rose following the rate cut, with the central bank acting to stabilize the currency amidst potential capital outflows.

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