RBI MPC announcement: Central bank cuts repo rate by 25 bps to 6%, Guv Malhotra says more policy rate cuts likely

The Reserve Bank of India (RBI) on Wednesday reduced the repo rate by 25 basis points to 6 per cent with immediate effect, RBI governor Sanjay Malhotra said at the post monetary policy committee (MPC) meet address.

The decision was taken unanimously, Malhotra added. "The MPC voted unanimously to reduce the policy repo rate by 25 basis points to 6 per cent with immediate effect," he said.

The RBI MPC decided to change its stance from 'neutral' to 'accommodative'. With this, home loan rates are likely to go down. The marginal standing facility rate stands at 6.25 per cent as of now.

This was the first monetary policy committee (MPC) meeting of the financial year 2025-26. The RBI announcement comes as the world reels under the impact of US President Donald Trump's tariff announcements. 

Furthermore, the RBI boss said that the central bank is alert on emerging global developments. Malhotra mentioned that due to the tariff announcements, the US dollar has weakened, crude oil prices have gone down, and markets have been on tenterhooks.

He mentioned that India's economy has made steady progress on inflation and growth while weathering global uncertainties. "Going forward, in the absence of any shocks, the MPC is considering only two options, i.e., status quo or rate cut," Malhotra mentioned.

The committee met for three days from April 7-9. Commenting on the central bank's decision to reduce the repo rate by 25 bps, Bankbazaar.com CEO Adhil Shetty said this could lead to increased investment in real estate and a boost in housing demand. 

"The Reserve Bank of India has reduced the repo rate by 25 basis points, bringing it down to 6%, as part of its ongoing efforts to stimulate consumption and accelerate economic growth. Lowering the policy rate is aimed at making borrowing more attractive, which could lead to increased investment in real estate and a boost in housing demand," Shetty said. 

CREDAI National President Boman Irani said: "With CPI inflation expected to moderate to 4.5%, the rate cut is well-timed to uplift consumer sentiment and enhance borrowing capacity—especially in the housing sector. It is likely to improve home loan affordability, stimulate housing demand, and provide a strong impetus to the mid-income and affordable segments, where interest rate sensitivity remains high. The RBI’s continued policy easing highlights its commitment to sustaining growth while safeguarding macroeconomic stability."