RBI MPC Meeting 2025 HIGHLIGHTS: RBI cuts repo rate by 25bps, shifts to accommodative stance

RBI Governor Sanjay Malhotra has cut GDP growth estimate for FY26 to 6.5% from 6.7%.

Here are GDP estimates as announced by the RBI:

Q1: 6.5%

Q2: 6.7%

Q3: 6.6%

Q4: 6.3%

RBI Governor Sanjay Malhotra announced that the MPC has decided to change the stance of the monetary policy from neutral to accommodative.

RBI MPC, under the leadership of Governor Sanjay Malhotra, unanimously decided to cut the key interest rate by 25 bps to 6.00 per cent from 6.25 per cent earlier.

JM Financial said that the RBI has been proactive in its liquidity management function since the start of 2025, which has effectively led to a reversion in liquidity to surplus (Rs 2.1 trillion) as on 3rd April vs. deficit of Rs 3.1 trillion in Jan’25. “Surplus liquidity position aids in better rate transmission; currently, the call money rates are already trading at <6%, signalling steep rate cuts ahead. When it comes to signalling, the RBI Governor’s recent speech highlighted that policy will continue to be “proactive, agile and flexible” while supporting growth, which provides the required comfort to the markets. On the liquidity front, OMO purchases by the RBI have been consistent since Jan’25, even as money supply (M2) decelerated. We believe it is unlikely the MPC will vote for a change in policy stance until liquidity is in surplus on a durable basis,” the brokerage firm said.

According to the RBI, Governor Sanjay Malhotra will begin his speech announcing the decision on the key interest rate at 12:00 noon. Traditionally, the RBI governor announces the decision of the monetary policy committee at 10:00 am on the third day of the meeting.

Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd, said, “The Reserve Bank of India is anticipated to reduce the repo rate by 25 basis points, bringing it down to 6%. This move is aimed at stimulating consumption and driving economic growth. A lower policy rate serves as a catalyst for increased borrowing, encouraging more individuals to invest in home purchases, thereby boosting demand in the housing market. However, the actual impact of this rate cut will largely depend on how effectively and swiftly commercial banks transmit the RBI’s policy decision to borrowers. For the intended benefits to materialize, the transmission of the reduced rates must be both faster and smoother. Ensuring a seamless and timely pass-through of the rate cut will lead to a higher demand for retail loans, including home loans, ultimately benefiting the real estate sector and contributing positively to overall economic expansion.”

Aastha Gudwani, India Chief Economist, Barclays, said. “We are tracking March CPI inflation at 3.7 per cent YoY, implying average CPI inflation during January March at 3.9 per cent YoY, a sizable 50bp below the RBI MPC’s 4.4 per cent YoY estimate. We are now tracking FY24-25 average CPI inflation at 4.7 per cent YoY and see it slowing to 4 per cent YoY in FY25-26. Assuming a real rate of 1.5 per cent, we forecast the terminal policy rate at 5.5 per cent by December 2025,” said Aastha Gudwani.

The RBI had eased rates by 25 bps for the first time since Covid during last Policy Meet in February. It was also the first RBI MPC meeting after Guv Sanjay Malhotra took over.

You can watch the RBI Governor’s speech live at 12 noon. Stay tuned to Financialexpress.com for the live coverage. We get you news and views as it unfolds.

Also Read: RBI MPC Meet: Rate decision on April 9 — When and where to watch Monetary Policy Meeting?

Gaura Sengupta, Chief Economist, IDFC FIRST Bank, said, “We continue to expect RBI to cut policy rates by 25bps in the April policy. There is speculation that RBI should frontload rate cuts with a 50bps cut in April but that may be too premature given ongoing bilateral trade negotiations. Moreover, thanks to the substantial liquidity infusion by the RBI overnight rates are below the repo rate. The TREPS rate has been below the repo rate since March 2025 onwards and is averaging at 5.73 per cent in the first week of April. This removes the need to frontload rate cuts in April policy.”

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Mandar Pitale, Head, Treasury, SBM Bank India, said, “The upcoming RBI Monetary Policy review is coming at the backdrop of global growth heading for significant headwinds due to cumulative effect of trade related tariff barriers, rapid currency movements and sporadic capital flows. This may result in a fall in global GDP impacting the global growth engine.”

While maintaining that the RBI is expected to cut the key interest rate by 25 bps, he said that the central bank will not change its stance. “With the announcement of Rs 0.8 trillion (Rs 80,000 crore) OMO purchases in April, the likelihood of announcement of change of stance from “neutral to accommodative” during April policy stands reduced,” he added.

Before April, the RBI MPC had met on February 6-8 and had taken a decision to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent. The stance was also maintained at ‘withdrawal of accommodation’. While delivering his speech, Shaktikanta Das had said, “These decisions are in consonance with the objective of achieving the medium- term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.”

After the three-day meeting in April 2024, the RBI MPC had unanimously decided to keep the key interest rates unchanged at 6.50 per cent with policy stance also maintained at ‘withdrawal of accommodation’. The then RBI Governor Shaktikanta Das had said that the GDP growth forecast for FY25 was at 7 per cent.

During the June meeting, the RBI MPC had announced that the panel members decided to keep the repo rate unchanged at 6.5 per cent for the eight consecutive time by a 4:2 majority. The RBI had, after its three-day deliberations, raised its GDP growth forecast for FY25 to 7.2 per cent from 7 per cent earlier, while retaining the FY25 inflation forecast at 4.5 per cent.

Before October, the RBI MPC had met in August and decided to keep the benchmark interest rate unchanged at 6.50 per cent. The MPC had voted by a 4 to 2 majority to hold the policy rate. The central bank had retained real GDP growth estimates for FY25 at 7.2 per cent, and CPI inflation projection at 4.5 per cent.

In its October meeting, the RBI MPC had decided to keep the policy repo rate unchanged at 6.50 per cent for the 10th consecutive time. Five members had voted in favour of the decision. During this meeting, the central bank had changed its stance to ‘Neutral’ while the focus remained unambiguously on inflation. GDP growth for FY25 was projected at 7.2 per cent and inflation for the financial year at 4.5 per cent.

The previous meeting that took place in December 2024, under the former Governor Shaktikanta Das, had decided to keep the key rates unchanged at 6.50 per cent. Four out of its six members had voted to keep the repo rate unchanged. Moreover, recognizing the country’s liquidity constraints, the MPC had reduced the Cash Reserve Ratio (CRR) for banks by 50 bps, bringing it down to 4 per cent.

In the February 2025 RBI MPC meeting, which was also the first meeting under the leadership of Governor Sanjay Malhotra, the central bank had announced a 25 bps cut in the benchmark repo rate to 6.25 per cent from 6.5 per cent. This was the first reduction in repo rate in nearly five years. The MPC had also decided unanimously to continue with the neutral stance and remain focused on a durable alignment of inflation with the target, while supporting growth.

Earlier in March, the RBI had released its meeting schedule for the financial year 2025-26. The six scheduled MPC meetings for FY26 are as follows:

April 7-9, 2025

June 4-6, 2025

August 5-7, 2025

September 29 – October 1, 2025

December 3-5, 2025

February 4-6, 2026

With the three-day RBI MPC meeting ending today, Governor Sanjay Malhotra will announce the decision of the policy committee at 10:00 am. One can watch the RBI governor’s address on the official YouTube channel of RBI. Also, For real-time updates and analysis on the RBI’s decisions, one can check major financial news platforms including FinancialExpress.com, and even social media.

The RBI’s Monetary Policy Committee (MPC), headed by Governor Sanjay Malhotra, consists of six-members which includes three external members. Earlier in October, the Centre had appointed the three external members. The new members are Saugata Bhattacharya, Economist; Dr Nagesh Kumar, Director and Chief Executive, Institute for Studies in Industrial Development; and Professor Ram Singh, Director, Delhi School of Economics, University of Delhi.

The three internal members are Chairperson Sanjay Malhotra, RBI Executive Director Dr Rajiv Ranjan, and Deputy Governor M Rajeshwar Rao.

Good Morning! With the RBI MPC meeting entering is third day of deliberations and Governor Sanjay Malhotra all set to announce the decision today, we, at FinancialExpress.com, are all set and ready to bring to you all the updates on the repo rate, inflation and growth estimates, factors that may or may not have impacted the decision, economists’ views and much more. Stay tuned for all the updates.