RBI Monetary Policy Highlights: MPC cuts repo rate by 25 bps, shifts stance to accommodative; trims GDP growth forecast

RBI MPC Highlights: Here are the key takeaways of the April RBI Policy today:

1] Policy Measures:

• Repo rate cut by 25 bps to 6%
• Policy stance unchanged at ‘Accommodative’
• SDF rate reduced to 5.75%
• MSF rate reduced to 6.25%
• MPC members unanimously voted to reduce the policy repo rate

2] GDP Growth Estimates:

RBI projects FY26 GDP growth at 6.5% versus 6.7% earlier; Here are quarterly estimates:

• FY26 at 6.5%
• Q1FY26 at 6.5%
• Q2FY26 at 6.7%
• Q3FY26 at 6.6%
• Q4FY26 at 6.3%

3] CPI Inflation Forecast

CPI inflation for FY26 is projected at 4% from 4.2% earlier. Here are quarterly projections:

• Q1FY26 at 3.6%
• Q2FY26 at 3.9%
• Q3FY26 at 3.8%
• Q4FY26 at 4.2%

4] Additional Measures

• To enable securitisation of stressed assets through market-based mechanism
• Extended the scope of co-lending to all regulated entities and to all loans
• To issue comprehensive regulations on prudential norms and conduct related aspects for gold loans
• Harmonise the regulations governing non-fund-based facilities across regulated entities
• NPCI will decide the transaction limits in UPI for person to merchant transactions
• Proposed to make Regulatory Sandbox theme-neutral and ‘on-tap’.

RBI MPC Meet LIVE: Despite the RBI delivering a much-anticipated 25 basis points rate cut on Wednesday, the Indian stock market declined as investors were worried about the economic fallout of US-imposed tariffs on the country and the world. Geopolitical uncertainty also pushed RBI Governor Sanjay Malhotra to cut the FY26 growth forecast for the Indian economy to 6.5% from 6.7% earlier.

Against this backdrop, Sensex ended 380 points or 0.51% lower at 73,847 while the Nifty 50 closed at 22,399, down 137 points or 0.61%.

Sectorally, barring Nifty FMCG and Nifty IT, all other major indices ended with cuts.

RBI MPC Meet LIVE: We believe cumulative rate cuts could reach 100 basis points reflecting that trade tensions will persist rather than resolve quickly. For investors, this suggests a market environment where defensive positioning may outperform growth-oriented strategies despite monetary easing.

– Views by Viram Shah, Founder & CEO, Vested Finance

Nirmal Jain of IIFL Group hailed the RBI policy decision, calling it “a pragmatic policy for uncertain times”. He added the move is timely amid global trade tensions and slowing growth.

RBI MPC Meet LIVE: We see RBI’s change in stance to ‘accommodative’ as an intent for a deeper rate cut cycle. This is in line with our view of another 75-100 bps of rate cuts in FY2026E, implying repo rate at 5-5.25% by end-FY2026E. The benign outlook on inflation (favorable monsoon, lower crude oil prices to offset INR depreciation) and downside risks to growth will provide room for this deeper rate cut cycle. The RBI’s focus remains on addressing growth concerns as inflation is expected to remain around the 4% handle. We also expect the RBI to keep liquidity conditions ample to ensure smooth monetary policy transmission.

– Views by Suvodeep Rakshit, Chief Economist, Kotak Institutional Equities

RBI MPC Meet LIVE: While acknowledging that the global outlook is clouded with tariff uncertainties, it appears that RBI is more inclined to support growth. Domestic inflation has downside from crude prices and positive drivers from food inflation. While there is risk from imported inflation from currency, inflation is not as much of a concern as much as growth. Overall, the trajectory, despite being guarded has tilted towards a growth-inflation balance from inflation-growth in the previous regime, with a clear emphasis on supporting growth. While there is unknown from tariffs, another unknown is always the weather. While governor acknowledged that tariff-related uncertainties are very high, if India is able to manage with lesser dent on inflation, then we can expect more rate cuts down the line.

– Views by Anitha Rangan, Economist, Equirus Securities

RBI MPC Meet LIVE: RBI’s 25 bps rate cut to 6% and shift to an accommodative stance signals a growth-focused policy. This is a positive for liquidity and demand recovery. Rate-sensitive sectors like banks, NBFCs, real estate, and autos stand to gain. While banks may see some NIMs compression (Fitch estimates ~10 bps in FY26), improved credit offtake could balance it. Lower rates should boost home and vehicle loan demand. However, global headwinds, especially rising US tariffs, pose risks to export-driven sectors like IT and pharma. Overall, a supportive step for domestic growth with some caution on external pressures.

– Views by Pranay Aggarwal - Director & CEO of Stoxkart

RBI MPC Meet LIVE: There was an opportunity to front end the rate cuts with a 50 bps decline in April’25 since currency has strengthened, inflation fallen below target and US and Indian yield differential rising once again. However, the change in stance and sharp rise in surplus systemic liquidity will do for now. With an accommodative stance, markets now are certain that the only way forward for rates is downwards. Transmission will also improve, supported by the liquidity and the fact that share of EBLR loans have now increased to more than 60%, prompting faster pass through of repo declines to end user loan rates, said Debopam Chaudhuri, Chief Economist, Piramal Group .

RBI MPC Meet LIVE: Housing demand has been robust in the last 4-5 years, driven by stable macros, strong consumer sentiment, income and wealth growth. However, an increase in capital values has started impacting sales across segments. A further rate cut of 25 bps with an accommodative stance announced today, post a 25-bps rate cut in February 2025, is likely to further improve affordability. The falling interest rate cycle is likely to sustain consumer sentiment to some extent which has started seeing signs of weakening amid the current global turmoil and uncertainty, said Amit Bhagat, Co-Founder, CEO and MD, ASK Property Fund.

RBI MPC Meet LIVE: The RBI's 25 basis points reduction in the repo rate to 6% is a timely intervention. Change in stance to accommodative is sentimentally positive, allowing room for better liquidity and growth. Together, they will support both MSME and retail demand. We foresee improved credit appetite at Indian Bank as MSMEs form a vital part of our lending portfolio. Increasing scope of co-lending will further strengthen lending to these sectors.

This cut is likely to spur demand for home, auto, and personal loans, especially in tier 2 and tier 3 markets, where interest sensitivity is higher. Retail loans grew over 18% YoY as per recent trends and a lower rate environment could further accelerate consumption and support economic momentum. Indian Bank is fully geared to pass on the benefits swiftly and responsibly to our customers, ensuring inclusive credit growth, said Binod Kumar, MD & CEO, Indian Bank.

RBI MPC Meet LIVE: We believe the RBI’s decision to cut the repo rate will significantly boost investor confidence, encourage housing demand with improved affordability, and support the overall development of the real estate sector - especially by enabling more first-time homebuyers to enter the market.  With sustained demand and softening home loan interest rates, the sector’s growth momentum is set to accelerate well into 2025, said Ramani Sastri, Chairman and MD, Sterling Developers.

RBI MPC Meet LIVE: If inflation remains under/around 4% for FY26 then the real rate at 200 bps is on the higher side and mostly will be reduced by cutting interest rates further. However RBI would want to keep its arsenal intact if there is any disruption in the world order due to a tariff war. We believe RBI will watchfully go for a couple of more cuts in little over as many policy meets. 10 year bond yield may not show immediate correction but this policy has defined the near-term ceiling for it, said Siddarth Bhamre, Head of Research at Asit C Mehta Investment Interrmediates.

RBI MPC Meet LIVE: The RBI assured that liquidity will be infused as required, offering comfort to the markets. Forward projections may remain optimistic, with inflation expected to stay around 4% and GDP (Gross Domestic Product) growth projected at 6.5%. Given the benign inflation outlook, the RBI is likely to focus on growth through monetary stimulus measures. Overall, the policy is viewed as positive for fixed income markets, said Marzban Irani, CIO of Fixed Income at LIC Mutual Fund.

RBI MPC Meet LIVE: The RBI’s decision to reduce the repo rate by 25 basis points to 6% and adopt an accommodative stance reflects a strategic pivot to support economic growth amid the escalating global tariff war. This policy shift, effective immediately, adjusts the SDF rate to 5.75% and MSF rate to 6.25%, aiming to stimulate domestic investment and consumption as trade frictions erode export performance and global growth decelerates.

With FY26 GDP growth projected at 6.5% and CPI inflation at 4%, the RBI anticipates a manageable balance, potentially aided by softer commodity prices. However, persistent external pressures could challenge these projections, necessitating vigilant oversight to mitigate inflationary risks while fostering resilience in key sectors such as real estate and infrastructure. Market sentiment remains positive, though the efficacy of these measures will depend on navigating the complex interplay of global trade dynamics, said Ashwani Dhanawat, Executive Director and Chief Investment Officer, Shriram General Insurance.

RBI MPC Meet LIVE: Global volatility & huge uncertainty, due to unilateral final imposition of trade tariffs by the US, has led to wild movements on rates globally. For instance the US 10 yr Treasury yield has gone up by ~25 bps overnight. Tariffs, if continued for long, should be inflationary on the immediate basis while it’d slow demand in the medium term. RBI seems to be trying to move past the tariff noise and addressing the demand slowdown concern with the repo rate cut of 25 bps and change of stance to accommodative. Interesting times are up ahead over the next 1-2 months, and the US govt. actions will significantly impact rates globally including in India, said Suresh Darak, Founder, Bondbazaar.

RBI MPC Meet LIVE: Indian rupee is quite stable and that there are sufficient reserves.We do not target any level for currency. Market in India is deep and the market knows what the levels should be. There will be an intervention if required when there is any excessive volatility in rupee, says RBI Governor Sanjay Malhotra.

RBI MPC Meet LIVE: There is no worry on the personal loan growth front in banks, says RBI Governor Sanjay Malhotra.

RBI MPC Meet LIVE: The impact of US tariffs will be much less on India than other countries, says RBI Governor Sanjay Malhotra

RBI MPC Meet LIVE: I have never said that gold loan norms will be tightened. Have never said tightening in my statement w.r.t. gold loan guidelines. But norms will be rationalised. Draft gold loan circular will be out in public domain very shortly, said RBI Governor Sanjay Malhotra

RBI MPC Meet LIVE: We will provide sufficient liquidity for the purposes of monetary policy transmission. The trend on rates is going to be downwards. We will keep liquidity surplus, says RBI Governor Sanjay Malhotra

RBI MPC Meet LIVE: The trend on rates is going to be downwards, says RBI Governor Sanjay Malhotra.

RBI MPC Meet LIVE: Worried more about impact on growth than inflation, RBI Governor Sanjay Malhotra said on US tariffs’ impact.

RBI MPC Meet LIVE: Growth estimates revised lower mainly due to global uncertainties, says RBI Governor Sanjay Malhotra

RBI MPC Meet LIVE: RBI Governor Sanjay Malhotra begins his post-policy press conference

RBI MPC Meet LIVE: The RBI has equipped the Indian Economy with helmet (liquidity) , Bat and other accessories (interest rate cut) and pep talk (change of stance to accommodation) so that it can play on a green top wicket in a cold and cloudy (geo economical and political environment) morning against the seaming, fast and unpredictable bowling of President Trump. This is the best the coach can do. Now the players have to play it out so that we can score runs when the weather clears and pitch eases, said Nilesh Shah, MD, Kotak Mahindra AMC.

RBI MPC Meet LIVE: The repo rate cut, coupled with the commitment to maintain adequate liquidity, reflects a timely and prudent response to evolving macroeconomic challenges. This stance is a positive step toward reinvigorating demand and catalyzing investments across sectors. For the NBFC sector, in particular, it signals a conducive environment to deepen credit access and drive inclusive growth. We believe the proposed policy revisions will stimulate the banking and financial services ecosystem in the right direction and support the broader goal of sustaining a healthy and resilient economy, said Arvind Kapil, Managing Director & CEO of Poonawalla Fincorp.

RBI MPC Meet LIVE: A shift to accommodative stance, notwithstanding the earlier reference to global uncertainties has been the key takeaway. Effectively the key message is the unambiguous focus on domestic growth and the confidence that forward looking inflation is likely to be aligned closer to the policy target of 4%. Alongside the demonstrated commitment to address liquidity dynamics, the policy stance clearly opens up the likelihood of additional rate cuts in this cycle, said Rajeev Radhakrishnan, CIO - Fixed Income, SBI Mutual Fund.

RBI MPC Meet LIVE: The RBI has delivered what the market expected – a 25-bps cut and a change in stance to “accommodative”. It was also explained that being “accommodative” means that there would be no chance of a rate hike at this point, even as the RBI stays vigilant with the evolving macro scenario of tariff wars and geopolitical risks. Both inflation and growth forecasts were lowered by 20 bps. There were no fresh liquidity measures that were announced in this policy. The space for policy rate cuts were predicated by a decisive change in the inflation outlook, led by food prices and more specifically vegetable prices.

Overall, the confidence that inflation would remain aligned to the 4% target has magnified. Given a 4% inflation target, the scope of pushing the repo rate down to 5.50% in this cycle has opened. Consequently, we expect the RBI to cut in June and also in August, said Indranil Pan, Chief Economist at YES Bank.

RBI MPC Meet LIVE: RBI’s Monetary Policy outcome was inline with consensus estimates and a 25 bps rate cut should augur well both for the financial system and the economy. Given the ongoing tariff war across the world, an accommodative stance along with a stable inflationary scenario would ensure buoyant credit growth and support our domestic environment. The rate cut is indeed positive for our bond markets but the ongoing pressure on the US bond yield restricts the full extent of the impact in India, said Umeshkumar Mehta, CIO, SAMCO Mutual Fund.

RBI MPC Meet LIVE: RBI MPC cut repo rate by 25 bps, which was as per expected lines. It also changed its stance to neutral, which denoted that RBI is now unequivocal in its support of domestic growth and confident that inflation will move towards its desired rate of 4%. I expect the curve to steepen with the shorter end of the curve benefitting more. In the US, the tariff induced inflation fears are rising, which will lead to rising long bond yields. High global yields will influence the longer end bond yields in India as well. Investors should stick to Short duration funds, which offer a good risk reward trade off, said Sandeep Bagla, CEO, TRUST Mutual Fund

RBI MPC Meet LIVE: The minutes of the MPC’s meeting will be published on April 23, 2025.

RBI MPC Meet LIVE: Uncertainty in itself dampens growth by affecting investment and spending decisions of businesses and households. Second, the dent on global growth due to trade frictions will impede domestic growth.

Third, higher tariffs shall have a negative impact on net exports. There are, however, several known unknowns - the impact of relative tariffs, the elasticities of our export and import demand; and the policy measures adopted by the Government including the proposed Foreign Trade Agreement with the USA, to name a few. These make the quantification of the adverse impact difficult, said RBI Governor Sanjay Malhotra.

RBI MPC Meet LIVE: At present, the transaction amount for UPI, covering both Person to Person (P2P) and Person to Merchant payments (P2M), is capped at ₹1 lakh except for specific use cases of P2M payments which have higher limits, some at ₹2 lakh and others at ₹5 lakh. To enable the ecosystem to respond efficiently to new use cases, it is proposed that NPCI, in consultation with banks and other stakeholders of the UPI ecosystem, may announce and revise such limits based on evolving user needs. Appropriate safeguards will be put in place to mitigate risks associated with higher limits. Banks shall continue to have the discretion to decide their own internal limits within the limits announced by NPCI. P2P transactions on UPI shall continue to be capped at ₹1 lakh, as hitherto. NPCI will be advised accordingly, RBI Governsaid.

RBI MPC Meet LIVE: With a view to harmonizing regulations across regulated entities (REs) while keeping in view their risk-taking capabilities, and also to address a few concerns that have been observed, it has been decided to issue comprehensive regulations, on prudential norms and conduct related aspects, for Loans against the collateral of gold jewellery and ornaments.

RBI MPC Meet LIVE: The extant guidelines on co-lending are applicable only to arrangements between banks and NBFCs for priority sector loans. In light of the evolution of such lending practices, and the potential of such lending arrangements in catering to the credit needs of a wider segment in a sustainable manner, it has been decided to expand the scope for co-lending and issue a generic regulatory framework for all forms of co-lending arrangements among Regulated Entities. The draft guidelines are being issued for public comments.

RBI Governor said that the draft framework for securitisation of stressed assets is being issued for public comments. The framework intends to enable securitisation of stressed assets through a market-based mechanism, in addition to the existing ARC route under SARFAESI Act, 2002.

RBI MPC Meet LIVE: The domestic growth-inflation trajectory demands monetary policy to be growth supportive, while being watchful on the inflation front. We are aiming for a non-inflationary growth that is built on the foundations of an improved demand and supply response and sustained macroeconomic balance. As before, we shall remain agile and decisive in our response and put in place policies that are clear, consistent, credible and in the best interest of the economy, said RBI Governor Sanjay Malhotra

RBI MPC Meet LIVE: The guidelines for co-lending will now be extended to all regulated entities. Comprehensive guidelines will be issued for loans against gold and non-fund-based entities. Additionally, NPCI will be permitted to set transaction limits for UPI, says, RBI Governor Sanjay Malhotra

RBI MPC Meet LIVE: The Indian stock market fell after the announcement of RBI policy. Sensex dropped over 400 points, while the Nifty 50 traded below 22,400. Banking stocks fell after RBI cut repo rate by 25 bps to 6%.

RBI MPC Meet LIVE: RBI to enable securitisation of stressed assets through market based mechanism. Loans against the collateral of gold loans, are extended by regulated entities, to both banks and NBFCs, announces RBI Governor Sanjay Malhotra.

RBI MPC Meet LIVE: RBI MPC cuts CPI inflation projections for FY26 to 4% from 4.2%. Here are the quarterly estimates:

• Q1FY26: Reduced to 3.6% from 4.5%
• Q2FY26: Reduced to 3.9% from 4.0%
• Q3FY26: Maintained at 3.8%
• Q4FY26: Raised to 4.4% from 4.2%

RBI MPC Meet LIVE: Evolving situation needs monitoring of the economic outlook. Policy stance should not be linked with liquidity conditions, says RBI Governor Sanjay Malhotra.

RBI MPC Meet LIVE: RBI cuts GDP growth projections for FY26 to 6.5% from 6.7%. Here are quarterly projections:

• Q1FY26: Cut to 6.5% from 6.7%
• Q2FY26: Cut to 6.7% from 7.0%
• Q3FY26: Cut to 6.6% from 6.5%
• Q4FY26: Cut to 6.3% from 6.5%

RBI MPC Meet LIVE: The standing deposit facility, the SDF rate, under the liquidity adjustment facility, shall stand adjusted to 5.75%, and the marginal standing facility, rate of the MSF rate and the bank rate shall stand adjusted to 6.25%: says RBI Governor Snajay Malhotra.

RBI Repo Rate News LIVE: RBI MPC changes policy stance to ‘accommodative’ from ‘neutral’.

RBI Repo Rate News LIVE: RBI cuts repo rate by 25 bps to 6% with immediate effect

RBI MPC Meet LIVE: RBI Governor Sanjay Malhotra begins his policy monetary speech

RBI MPC Meet LIVE: Watch RBI Governor Sanjay Malhotra’s policy speech live here

RBI MPC Meet LIVE: The swift shift in global sentiment, high market volatility, and fear of US/global recession amid the tariff shock cement our conviction of a 25 bps cut, with possible change in stance to ‘accommodative’ to give directional easing bias. The fluid global dynamics will require the RBI to be nimble in managing any risk of tighter financial conditions, especially as the shock to sentiment/capital flows is likely to require higher risk premia from EMs.

While the extent of trade war pain is unclear, monetary policy may have to do the heavy lifting in India. FY26 growth and inflation risk are skewed to the downside. However, we do not see RBI front-loading its ammunition, rather it may keep it ready for rain(ier) days. We will keep a lookout for any overhaul of the current liquidity framework in the near term and fiddle with non-conventional easing tools ahead apart from conventional easing, if the growth situation worsens or financial stability is disrupted, said Madhavi Arora, Lead Economist at Emkay Global Financial Services Ltd.

RBI MPC Meet LIVE: The Indian stock market benchmark indices, Sensex and Nifty 50, opened lower on Wednesday, ahead of the RBI policy announcement later today, amid fresh tariff threats from US President Donald Trump on pharma imports. 

The Sensex opened 123.25 points, or 0.17%, lower at 74,103.83, while the Nifty 50 began trading at 22,460.30, down 75.55 points, or 0.34%.