This is the first instance after 12 policies that the repo rate has been cut by the RBI Monetary Policy Committee. The repo rate now stands at 6.25% from 6.5% earlier.
The Standard Deposit Facility and the Marginal Standing Facility have both been adjusted by 25 basis points each.
The MPC has also unanimously voted to keep the policy stance at “neutral”.
The Governor said that the “neutral” stance will give the RBI flexibility to respond to the environment around.
India’s financial year 2026 Gross Domestic Product (GDP) growth is seen at 6.7%, Governor Malhotra said, adding that he expects food inflation pressures to see “significant softening.”
GDP growth for the first quarter of financial year 2026 is projected to be at 6.7%, followed by 7% in the second quarter, 6.5% in the third and 6.5% in the fourth quarter as well.
On the inflation front, Malhotra projected a 4.8% figure for the current financial year and 4.2% for the financial year 2026. For the current quarter, the CPI print is seen at 4.4%.
The risks are evenly balanced for both growth and inflation.
The governor also addressed the recent depreciation in the currency, saying that the RBI’s exchange rate policy has remained consistent and that their forex market interventions are aimed at smoothening volatility and not targeting a specific rate or band.
“Will continue to monitor evolving liquidity and financial market conditions and proactively take appropriate measures to ensure orderly liquidity conditions as required for the system,” the governor also said, after the liquidity-related announcements last week.
The RBI has extended the two-factor authentication for international digital transactions to offshore merchants.
Check the latest updates on RBI MPC here.
First Published: Feb 7, 2025 10:11 AM IST