New Delhi: In a significant monetary policy move, the Reserve Bank of India (RBI) today announced a reduction in the repo rate by 25 basis points, bringing it down from 6.50% to 6.25%. The decision comes amid signs of slowing economic activity and aims to stimulate growth while keeping inflation within manageable limits.
RBI Governor Shaktikanta Das, while addressing the press, said, “The Indian economy is facing headwinds from global uncertainty and domestic demand constraints. This calibrated rate cut is intended to provide support to growth while ensuring inflation remains aligned with our target.”
The Monetary Policy Committee (MPC) voted 5-1 in favor of the rate cut, indicating a growing consensus within the central bank about the need for a more accommodative stance.
Economists welcomed the move. Dr. Radhika Menon, Chief Economist at Axis Research, said, “This rate cut sends a strong signal of the RBI’s commitment to reviving economic momentum. It could also ease borrowing costs for businesses and consumers.”
Markets responded positively, with the BSE Sensex rising over 300 points post-announcement, reflecting investor optimism about the central bank’s pro-growth stance.
However, some analysts urged caution. “Rate cuts can only do so much. Structural reforms and fiscal support must accompany monetary easing for sustainable growth,” said Arvind Rao, senior economist at ICICI Securities.
With this move, the RBI has signaled its readiness to act in support of the economy, but future actions will depend on data trends in inflation, demand, and global development.
[Report by Amit Deshmuk]
