RBI MPC Meeting April 2025 Highlights: Repo Rate Cut by 25 bps to 6%, Stance Shifted to ‘Accommodative’ to Support Growth

Mumbai, April 9, 2025 – In a move widely anticipated by markets and economists alike, the Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points (bps) to 6%, shifting its monetary policy stance from 'neutral' to ‘accommodative’. The decision was announced by RBI Governor Sanjay Malhotra following the conclusion of the Monetary Policy Committee (MPC) meeting held from April 7 to April 9, 2025.

This is the second consecutive rate cut in 2025, following a similar 25 bps reduction in February. The RBI’s decision aligns with market expectations, amid cooling consumer price inflation (CPI) and persistent global economic uncertainties, particularly stemming from trade tensions led by the Trump administration in the United States.

🔑 RBI MPC Meeting April 2025 – Key Highlights & Announcements

1. 📉 Repo Rate Cut:

   • The repo rate has been reduced by 25 bps, from 6.25% to 6.00%.

   • Reverse repo rate adjusted accordingly to 5.75%.

   • Monetary policy stance changed to ‘accommodative’ to stimulate demand and economic growth.

2. 📊 Inflation & GDP Projections:

   • CPI Inflation for FY2025-26 is projected at 4.0%, comfortably within the RBI’s medium-term target of 4% (range: 2-6%).

   • Real GDP Growth for FY26 estimated at 6.5%.

     • Q1: 6.5%

     • Q2: 6.7%

     • Q3: 6.6%

     • Q4: 6.3%

3. 💰 Liquidity & Systemic Measures:

   • January saw a liquidity deficit of over ₹3.1 lakh crore, prompting the central bank to adopt a more supportive stance.

   • Co-lending will now be permitted for all regulated entities, expanding credit availability across sectors.

   • The P2P (peer-to-peer) transaction limit remains at ₹1 lakh per transaction.

4. 💸 Digital Payments & UPI Updates:

   • The National Payments Corporation of India (NPCI) has been entrusted to set UPI transaction limits for person-to-merchant (P2M) transfers.

   • This move aims to enhance UPI ecosystem efficiency, foster digital financial inclusion, and better manage systemic risks.

🔎 RBI MPC Meeting Calendar for FY2025-26

The RBI holds six bi-monthly MPC meetings each financial year. Here is the complete schedule for FY26:

• June 4–6, 2025

• August 5–7, 2025

• September 29 – October 1, 2025

• December 3–5, 2025

• February 4–6, 2026

📉 Background: What Influenced the RBI's Decision?

The RBI’s policy decision comes in the backdrop of:

• A decline in inflation to 3.61% in February 2025.

• Moderating global crude oil prices.

• Trade disruptions caused by the US-China tariff war.

• India's Q3 FY25 GDP grew at 6.2%, a rebound from the previous quarter’s seven-quarter low of 5.4%.

• Persistent liquidity tightness in the banking system.

The rate cut is intended to spur consumption, boost private investment, and support overall economic recovery in light of global volatility and tightening by other major central banks.

📌 Expert Take: Market Reaction and Outlook

Market experts have welcomed the decision, calling it a pro-growth move that balances the RBI’s dual mandate of maintaining price stability and supporting economic growth.

“The RBI’s accommodative stance and the rate cut should boost credit demand and improve business sentiment. Given the subdued inflation trajectory, this was a prudent and timely move,” said Dr. Ramesh Shah, Chief Economist at Axis Securities.

📝 Conclusion

With the repo rate now at 6% and an accommodative policy stance, the RBI has signaled its intent to support India’s growth momentum amid external shocks and domestic liquidity challenges. Future rate actions will likely depend on inflation trends, global commodity prices, and fiscal developments.