♦ The Reserve Bank of India’s six-member Monetary Policy Committee (MPC) has slashed the repo rate by a 50 basis points to 5.50 percent, marking the third consecutive reduction since February 2025.

♦ The MPC move aims to boost growth prospects as inflation remains below the 4 percent target.

♦ The rate cut will benefit borrowers, especially home loans, while depositors and savers can expect lower returns on their bank deposits in the coming months.

♦ The central bank also cut the cash reserve ratio of banks by 100 basis points to 3 percent, releasing Rs 2.5 lakh crore of lendable resources to the banking system.

Highlights:

♦ The RBI has revised its inflation outlook for 2025-26 downwards from the earlier forecast of 4 percent to 3.7 percent. 

♦ The RBI has projected India’s Gross Domestic Product (GDP) growth at 6.5 percent for 2025-26, with domestic economic activity showing resilience on the back of a strong agriculture sector, industry picking up, and the services sector expected to maintain momentum.