The Reserve Bank of India (RBI) on Friday cut key benchmark interest rate for the first time in six months and took steps to boost liquidity to support a “goldilocks” economy in the face of high US tariffs.
The six-member monetary policy committee, led by RBI Governor Sanjay Malhotra, voted unanimously to lower the repurchase or repo rate by 25 basis points to 5.25 per cent and retained a neutral stance, which give room for further rate cuts. IN doing so, the central bank seems to have shrugged off concerns over fall in the rupee, which breached
90 to a dollar this week. The currency is down almost 5 per cent against the dollar this year, the worst performer in Asia. This is the fourth rate cut by the central bank since February 2025. It held rates in August and October bimonthly monetary policy meetings. Based on the recommendation of the MPC, the RBI reduced repo rate by 25 basis points each in February and April, and 50 basis points in June amidst easing retail inflation.
