RBI MPC announces rate cut by 25 bps to 6%; Governor flags US tariff concerns

The Reserve Bank of India (RBI), Monetary Policy Committee (MPC) has unanimously decided to reduce the repo rate by 25 bps to 6 per cent, said Governor Sanjay Malhotra on Wednesday.

Presenting the first monetary policy for the financial year 2025-26, he announced that the MPC has decided to change the stance to ‘accommodative’ from ‘neutral’.

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The Governor also announced that the Standing Deposit Facility (SDF) rate now stands at 5.75 per cent, while the Marginal Standing Facility (MSF) rate and the Bank Rate have been revised to 6.25 per cent.

The RBI Governor also discussed the US tariff, saying it has posed ‘new headwinds’ for global growth and inflation.

“Overall, the year has begun on an anxious note for the global economy. Slow down in global growth could entail further softening in commodity and crude oil prices,” he said.

“The recent trade tariff-related measures have exacerbated uncertainties clouding the economic outlook across regions, posing new headwinds for global growth and inflation. Financial markets have responded through a sharp fall in the dollar index and equity sell-offs with significant softening in bond yields and crude oil prices,” the Governor said.

On the GDP, Governor Malhotra projected the growth at 6.5 per cent and on a quarterly basis, he said the GDP for Q1 is projected at 6.5 per cent; Q2 at 6.7 per cent; Q3 at 6.6 per cent; and Q4 is 6.3 per cent.

Further, on the inflation, he said for FY26, the inflation is projected at 4 per cent. For Q1, it is projected at 3.6 per cent; Q2 at 3.9 per cent; Q3 at 3.8 per cent; and Q4 at 4.4 per cent .

The outlook for food inflation has turned decisively positive. There has been a substantial and broad-based seasonal correction in vegetable prices.

In such challenging global economic conditions, the benign inflation and moderate growth outlook demand that the MPC continues to support growth, he said.