RBI Cuts Repo Rate to 6%, Adopts Accommodative Stance Amid Global Tariff Tensions

Mumbai: In a bid to support India’s slowing economic growth amid global uncertainty, the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) slashed the repo rate by 25 basis points, bringing it down to 6% from 6.25%. The move, announced by RBI Governor Sanjay Malhotra, follows a three-day meeting that ended on April 7.

This marks the second consecutive rate cut under Governor Malhotra’s leadership and signals a shift in policy stance from neutral to accommodative, suggesting the RBI will now lean toward maintaining or reducing rates in future reviews.

The decision comes amid rising concerns over global trade tensions, particularly after the United States imposed a 26% tariff on Indian exports. The RBI also revised India’s GDP growth forecast for FY26 from 6.7% to 6.5%, citing the impact of external economic pressures.

Inflation projections have shown improvement, with RBI forecasting headline inflation to remain close to the 4% target throughout FY26, aided by falling food prices.

Markets reacted mildly to the announcement. The 10-year bond yield dipped to 6.50%, the rupee weakened slightly to ₹86.61/$, and the Sensex and Nifty declined by 0.5% and 0.7%, respectively.

Governor Malhotra emphasized the RBI’s focus on non-inflationary growth, backed by improved demand and supply responses and sustained macroeconomic stability.