Reserve Bank of India Cuts Rates Again Amid Rising Global Uncertainties

The Reserve Bank of India reduced interest rates for a second consecutive time, aiming to boost the economy under pressure from US tariffs. The repo rate was cut to 6%, the lowest since 2022. The policy stance shifted to 'accommodative,' suggesting further cuts are possible as global uncertainties linger.

The Reserve Bank of India (RBI) has cut interest rates for the second time in as many months, as it attempts to shield the domestic economy from the impact of escalating US tariffs. The Monetary Policy Committee (MPC) unanimously decided on a 25 basis point reduction, bringing the repo rate to 6%.

RBI Governor Sanjay Malhotra confirmed this shift from a neutral to an accommodative policy stance, signaling potential future rate cuts to help boost the economy amid persistent global uncertainties. This reduction marks the lowest borrowing cost since November 2022, aimed at spurring consumer demand and investment.

Simultaneously, the RBI revised its economic growth forecast downward and noted complexities arising from global trade tensions. Recent US tariffs are predicted to further hinder India's GDP growth. Despite these challenges, the RBI remains committed to supporting non-inflationary growth through accommodative monetary policies.

(With inputs from agencies.)