RBI’s Monetary Policy Committee has reduced the policy repo rate by 25 basis points

Current Context: The RBI’s 1st Bi-monthly Monetary Policy of FY 2025-26, announced on April 9, 2025, focused on balancing growth and inflation amid evolving economic challenges. Chaired by RBI Governor Shaktikanta Das.

• Repo Rate: Reduced by 25 basis points to 6.00%, with the SDF at 5.75% and the MSF/Bank Rate at 6.25%.
• Policy Stance: Shifted from neutral to accommodative, signaling potential future rate cuts to support growth.
• GDP Growth Projection: Revised downward to 6.5% for FY 2025-26, from the earlier estimate of 6.7%.
• Inflation Forecast: Lowered to 4.0%, within the target range of 4% ± 2%.

Developmental Measures:

• Draft frameworks for securitization of stressed assets and co-lending arrangements.
• Review of guidelines for gold loans and non-fund-based facilities.
• Proposed revisions to UPI transaction limits and a theme-neutral Regulatory Sandbox for fintech innovation.

Question:

Q.1 What is the revised policy repo rate as announced by the RBI during the MPC meeting on April 9, 2025?
a) 6%
b) 6.25%
c) 6.5%
d) 5.75%

Answer: a) The RBI reduced the repo rate by 25 basis points from 6.25% to 6% to boost economic growth.