The Reserve Bank of India reduced the interest rate for the first time in nearly five years. The Monetary Policy Committee (MPC) of the RBI has unanimously decided to slash the policy rate by 25 basis points. The Reserve Bank of India reduced the policy repo rate to 6.25 per cent from 6.5 per cent. Consequently, the standing deposit facility (SDF) rate will be at 6.0 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.5 per cent. The MPC also decided unanimously to continue with the ‘neutral’ stance and to remain unambiguously focused on a durable alignment of inflation with the target, while supporting growth.
The 25 basis points rate cut to 6.25 per cent comes after the last rate reduction in May 2020. The last revision of rates happened in February 2023 when the policy rate was hiked by 25 basis points to 6.5 per cent.
