RBI cuts repo rate by 25 basis points to 6.25 per cent

The Reserve Bank of India (RBI) on Friday announced a 25 basis points (bps) cut in the policy repo rate,lowering it to 6.25%, with the Monetary Policy Committee (MPC) voting unanimously in favour of the decision. The MPC also decided to maintain a ‘neutral’ stance while reiterating its commitment to bringing inflation within the target range on a durable basis.Delivering his first monetary policy announcement since taking over as RBI Governor in December, Sanjay Malhotra emphasised the need to balance stability and efficiency in economic management. He highlighted that while regulations are necessary to enhance financial stability, they come with costs, and the RBI would keep trade-offs in mind when formulating policies.

Watch: RBI Governor Sanjay Malhotra says, "...After a detailed assessment of the evolving macroeconomic and financial developments and the economic outlook, as I mentioned, we are forward-looking, the MPC decided unanimously to reduce the policy rate by 25 basis points from 6.5%… pic.twitter.com/SicZEt58HZ

— IANS (@ians_india) February 7, 2025

The RBI had kept the repo rate unchanged at 6.5% for the previous eleven consecutive meetings. In the December policy meeting, the MPC voted 5-1 in favor of maintaining the rate, focusing on stability while continuing to monitor inflation trends.