LIVE: RBI slashes repo rate by 25 bps, trims GDP forecast for FY26 to 6.5 pc

The Reserve Bank of India (RBI) on Wednesday (April 9) slashed key interest rate by 25 basis points, for the second time in a row, to support a shuttering economy hit by reciprocal tariffs imposed by the US.

Following the rate cut, the key policy rate eased to 6 per cent providing relief to home, auto and corporate loan borrowers.

In its last policy in February, RBI had trimmed repo rate by 25 basis points to 6.25 per cent. This rate came after previous rate reduction in May 2020. The last revision of rates happened in February 2023 when the policy rate was hiked by 25 basis points to 6.5 per cent.

The Monetary Policy Committee (MPC) unanimously decided to slash the policy rate by 25 basis points to 6.25 per cent, RBI Governor Sanjay Malhotra said.

GDP forecast

The RBI has lowered the GDP growth forecast to 6.5 per cent from earlier projection of 6.7 per cent due to global uncertainties.

Last week, US President Donald Trump had announced a hefty 26 per cent reciprocal tariffs on Indian imports, effective today.

Also read: RBI rate cut: Relief for common man as car, home loans may get cheaper

Investment activity has gained traction, and is expected to improve further on back of sustained capacity utilisation, said the Governor. He added that global uncertainties may put further pressure on the currency.

The rate-setting panel has decided to change the policy stance to 'accommodative' from 'neutral'. "Our stance provides policy rate guidance without any guidance on liquidity management," he Malhotra.

Read the live update below.