The Reserve Bank of India (RBI) reduced its key repo rate on Friday for the first time since May 2020, aiming to provide stimulus to the sluggish economy, which is projected to grow at its slowest pace in four years during the current fiscal year.

T he Reserve Bank of India (RBI) on Friday announced a 25 basis points (bps) cut in the policy repo rate, 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.

The former revenue secretary in the Ministry of Finance, Malhotra is expected to announce the cuts to lower interest rates for economy’s growth which is expected to reach a four year low.

The central bank’s Monetary Policy Committee (MPC) reduced the repo rate by 25 basis points to 6.25 per cent, after having kept it unchanged for eleven straight meetings

The RBI may have taken comfort from the tax cuts proposed in the Budget, which will offer some relief to the common man without hurting the fiscal math, as the deficit for FY26 has been pegged at 4.4 percent.

The Reserve Bank of India (RBI) cut its key repo rate for the first time in nearly five years on Friday to provide stimulus to the sluggish economy, which is expected to grow at its slowest pace in four years in the current fiscal year.