RBI set to hold first monetary policy review of 2025-26; all eyes on central bank's move

ANI April 6, 2025 274 views

The Reserve Bank of India is set to conduct its first monetary policy review meeting for 2025-26, with significant market anticipation. Experts predict a potential 25 basis point rate cut, following the previous reduction in February. The six-member monetary policy committee aims to balance price stability with economic growth. This meeting could signal a strategic shift from inflation management towards supporting economic expansion.

"The RBI's monetary policy committee will cut the repo rate by a cumulative 75 basis points in 2025" - Bank of Baroda
New Delhi, April 6: The Reserve Bank of India (RBI) will hold its first monetary policy review meeting of 2025-26 starting Monday. The outcome of the three-day meeting will be announced on Wednesday morning (10 am).

Key Points

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RBI to review monetary policy in first 2025-26 meeting

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Potential 25 basis point rate reduction expected

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Inflation target remains 2-6% range

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Six-member committee to decide economic strategy

The RBI typically conducts six bimonthly meetings in a financial year, where it deliberates interest rates, money supply, inflation outlook, and various macroeconomic indicators. The other five meetings are scheduled for June 4-6, August 5-7, September 29-October 1, December 3-5, and February 4-6.

The RBI monetary policy committee (MPC) consists of six members--three from the RBI, including the Governor, and three external members appointed by the central government.

The main objective of the MPC is to maintain price stability while supporting economic growth. The RBI's target is to keep inflation within the range of 2-6 per cent, with a medium-term goal of 4 per cent.

Inflation has been a concern for many countries, including advanced economies, but India has largely managed to steer its inflation trajectory quite well.

In the previous MPC meeting on February 7, the Reserve Bank of India (RBI) had unanimously decided to reduce the policy rate by 25 basis points (bps) from 6.5 per cent to 6.25 per cent. This was the first rate cut in about 5 years.

The repo rate is the rate of interest at which the RBI lends to other banks.

Barring the latest rate cut, the RBI has kept the repo rate elevated at 6.5 per cent since May 2022 in the fight against inflation. Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline.

Bank of Baroda asserted in a note recently that the RBI's monetary policy committee will cut the repo rate by a cumulative 75 basis points in 2025.

The Reserve Bank of India's monetary policy committee is expected to shift its focus from concerns around inflation to supporting growth in its next review meeting in early April, Care Edge Ratings had asserted recently. The rating agency in a report said the monetary policy committee will go for another 25-basis-point reduction in the repo rate at April 7-9 meeting.

Reader Comments

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Priya K.
Finally some relief for home loan borrowers! That 25bps cut in February was much needed. Hope they continue with another small cut this time 🤞 The economy really needs this boost.
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Rahul S.
While rate cuts are welcome, I think RBI should be more cautious. Inflation is still not completely under control globally. Better to wait 1-2 more quarters before further reductions.
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Ananya M.
As a small business owner, these rate decisions make a huge difference! Lower rates mean easier loans for expansion. RBI has done well balancing growth & inflation so far 👏
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Vikram P.
Interesting to see how RBI manages this delicate balance. The external MPC members bring good diversity of thought. Hope they consider rural economy challenges too.
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Sanjay T.
The transparency in RBI's policy making is commendable. Regular meetings with clear communication help markets prepare better. Much better than surprise announcements!
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Neha R.
I wish RBI would explain their decisions in simpler terms sometimes. All this talk of bps and repo rates can be confusing for regular people trying to understand how it affects them 😅

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Tags:
RBI Monetary Policy Repo Rate Inflation Economic Policy Shaktikanta Das
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