India

India cuts repo rate to 6% amid growth forecast of 6.5%

Policy shift reflects optimism in India's economic trajectory for 2025

India cuts repo rate to 6% amid growth forecast of 6.5%

The Reserve Bank of India (RBI) seal is pictured on a gate outside the RBI headquarters in Mumbai, India

Reuters

The Reserve Bank of India (RBI) reduced its benchmark interest rate by 25 basis points Wednesday, bringing the repo rate down to 6%, in a bid to stimulate economic growth amid evolving financial conditions.

The move was announced by Reserve Bank of India (RBI) Governor Sanjay Malhotra, who highlighted the country's GDP growth projection at 6.5% for the upcoming fiscal year. "The decision reflects our commitment to fostering a stable economic environment while ensuring inflation remains under control," Malhotra said in a press briefing.

Analysts suggest the rate cut could help boost lending and investment, providing support to industries impacted by global economic uncertainties. Markets reacted with cautious optimism, with investors assessing the potential implications on capital flows and inflationary trends.

Further policy measures will be evaluated based on evolving economic indicators, RBI officials noted.

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