RBI Monetary Policy 2025 Live Updates: On Wednesday, the Reserve Bank of India (RBI) announced its initial monetary policy decision for FY26, coinciding with rising global trade tensions stemming from recent tariff increases by the United States. RBI Governor Sanjay Malhotra remarked that the new fiscal year has commenced under a cloud of uncertainty. “The global economic landscape is rapidly evolving. Recent tariff-related actions have intensified the uncertainties surrounding the economic outlook across various regions, presenting new challenges for global growth and inflation,” stated Governor Malhotra during his address.
He further noted, “In the midst of this volatility, the US dollar has significantly depreciated; bond yields have notably decreased; equity markets are experiencing corrections; and crude oil prices have plummeted to their lowest levels in over three years.”
This announcement arrives amid escalating concerns regarding a potential global economic slowdown, with US protectionist policies casting a pall over emerging markets, including India.
In its previous policy review in February, the RBI had reduced the benchmark repo rate by 25 basis points to 6.25%, marking its first rate cut in nearly five years.
Further details regarding the RBI monetary policy committee include:
- In a significant move aimed at reducing loan EMIs, the RBI has again cut the repo rate by 25 basis points, lowering it from 6.25% to 6.0%, in response to an economy affected by retaliatory tariffs imposed by the US.
- The RBI has revised its GDP growth forecast down to 6.5% from a prior estimate of 6.7% due to global uncertainties.
- The projected GDP growth for each quarter is as follows: Q1 at 3.6%; Q2 at 3.9%; Q3 at 3.8%; and Q4 at 4.4%.
- The Consumer Price Index (CPI) inflation for the financial year 2025-26 is anticipated to be 4%, with quarterly projections of Q1 at 3.6%; Q2 at 3.9%; Q3 at 3.8%; and Q4 at 4.4%.
- The RBI reported that food inflation fell to a 21-month low of 3.8% in February, attributed to a significant seasonal correction in vegetable prices this year.
