The Reserve Bank of India (RBI) has announced a 26 basis points cut in the benchmark repo rate, bringing it down from 6.5% to 6.24%. The decision was made during the Monetary Policy Committee (MPC) meeting, which concluded on February 7, 2025.
This was the first policy review since Sanjay Malhotra took over as RBI Governor in December 2024, succeeding Shaktikanta Das. Market expectations were largely aligned with a 25 basis points cut, aimed at boosting liquidity and economic growth.
In the December 2024 MPC meeting, the RBI had infused ₹1.16 trillion into the banking system by slashing the cash reserve ratio (CRR) by 50 basis points, bringing it down to 4%, while keeping the repo rate steady at 6.5%.
The latest repo rate reduction is expected to ease borrowing costs, spur investment, and support economic recovery, with keen market attention on how it will impact inflation, credit demand, and overall financial stability.
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