The Reserve Bank of India has reduced its benchmark repo rate by 25 basis points to 6.0% and simultaneously shifted its monetary policy stance from neutral to accommodative. The decision was the second consecutive repo rate cut under Governor Sanjay Malhotra.
Under the accommodative stance, the Monetary Policy Committee will consider only rate reductions or a hold in the period ahead.
US TARIFF AND LIQUIDITY OPERATIONS
The decision came against the backdrop of the 26% tariff that the United States has applied to Indian exports.
The RBI injected about ₹6.9 lakh crore (roughly $80 billion) of liquidity into the banking system through open market operations, variable rate repo auctions and foreign exchange swap transactions during the preceding period.
SECOND CUT UNDER GOVERNOR MALHOTRA
Governor Malhotra assumed the governorship of the Reserve Bank in late 2024. The first cut in the current cycle was delivered at the previous MPC meeting.
The MPC said the rapidly evolving situation required continuous monitoring and assessment of the economic outlook.