Categories: BusinessNewsTop

RBI Cuts Repo Rate for the First Time in Five Years to Spur Economic Growth

Governor Sanjay Malhotra announces a 25 bps rate cut to 6.25%, focusing on boosting resilience amidst global economic challenges.

February 7, 2025: RBI Reduces Repo Rate After Nearly Five Years to Stimulate Economy

In a significant move, the Reserve Bank of India (RBI) has cut its key repo rate by 25 basis points (bps), bringing it down from 6.5% to 6.25%. This is the first rate reduction in nearly five years, aimed at boosting economic growth. The decision was announced by RBI Governor Sanjay Malhotra during his inaugural policy address since assuming office in December.

Also Read: From ₹0 to ₹5 Crore: Accenture Employee Shares His 11-Year Financial Journey

The Monetary Policy Committee (MPC), consisting of three RBI members and three external members, reached a unanimous decision to lower the rate. The last reduction occurred in May 2020, and the rate had remained unchanged through the last 11 policy meetings.

Also Read: Gold Prices Hit ₹84,000 Milestone: What Should Investors Do?

Economic Outlook:

Governor Malhotra highlighted the resilience of the global economy despite challenging conditions and noted that while India remains strong, it is not immune to global headwinds. He projected the real GDP growth for the current financial year at 6.4%, with an expected growth of 6.7% in the first quarter of the next financial year.

Also Read: Foreign Investors Pull ₹87,300 Crore from Indian Equities in January Amid Global Uncertainty

Inflation and Liquidity:

Retail inflation for the ongoing financial year is estimated at 4.8%, with a forecast of 4.4% in the last quarter. Although core inflation is expected to rise, food inflation is predicted to soften. Governor Malhotra assured that bank liquidity remains robust and emphasized the RBI’s proactive approach to maintaining liquidity conditions.

Concerns Over Cyber Fraud:

Addressing a surge in digital fraud, the Governor called for a collective effort from stakeholders to improve preventive and detection mechanisms. He urged banks to strengthen their cybersecurity infrastructure to tackle the rising threat.

This policy shift is expected to provide much-needed momentum to India’s economy while ensuring stability amidst global uncertainties.

Tags:

RBI repo rate, Indian economy, Sanjay Malhotra, Monetary Policy Committee, economic growth, inflation forecast, global economy, cyber fraud prevention, banking sector, rate cut analysis

Misha Bhatia

Recent Posts

Kumar Mangalam Birla on KBC 17: “Scared” to Face the Hot Seat

In a high-profile appearance for the finale week of Kaun Banega Crorepati (KBC) Season 17,…

8 hours ago

Kailash Kher Halts Gwalior Concert: ‘Janwargiri Mat Kariye’

Acclaimed Sufi singer Kailash Kher was forced to stop his live performance midway at the…

10 hours ago

Anaconda Movie Review: Comedy or Horror? Sadly, Neither

The 2025 reimagining of Anaconda is a film that recognizes the absurdity of its own…

10 hours ago

Sidharth Malhotra and Kiara Advani Celebrate Daughter Saraayah’s First Christmas

Bollywood’s favorite couple, Sidharth Malhotra and Kiara Advani, shared a heartwarming glimpse of their 2025…

10 hours ago

Centre Opposes GST Cut on Air Purifiers, Cites ‘Pandora’s Box’ Risk

The Central government on Friday expressed strong opposition to a Public Interest Litigation (PIL) filed…

11 hours ago

Top 10 Indian Acting Performances of 2025: From Dhanush to Jaideep Ahlawat

The year 2025 has been a landmark era for Indian cinema, defined by performances that…

11 hours ago