Daijiworld Media Network - New Delhi

New Delhi, Apr 9: In a bid to cushion the economy from the impact of reciprocal US tariffs, the Reserve Bank of India (RBI) on Wednesday announced a 25 basis points cut in the key interest rate bringing the repo rate down to 6 per cent. This marks the second consecutive rate reduction in 2025.

The move is expected to bring much-needed relief to home, auto, and corporate loan borrowers reeling under economic strain. The Monetary Policy Committee (MPC), headed by RBI Governor Sanjay Malhotra, unanimously voted for the rate cut, citing mounting global uncertainties and a pressing need to spur domestic growth.

"In light of the evolving macroeconomic scenario, the committee decided to reduce the policy repo rate by 25 basis points to 6.0 per cent," Malhotra announced, following the policy review meeting.

This follows the February 2025 cut, when the RBI lowered the rate to 6.25 per cent. Prior to that, the last rate reduction was in May 2020, while the most recent hike came in February 2023, pushing the rate to 6.5 per cent.

The central bank also revised India’s GDP growth forecast for FY26 to 6.5 per cent, down from an earlier projection of 6.7 per cent, attributing the dip to heightened global volatility and the burden of fresh trade restrictions.

The decision comes days after US President Donald Trump imposed 26 per cent reciprocal tariffs on Indian imports effective April 9, rattling trade sentiment and raising fears of a slowdown in key export sectors.

Experts believe the RBI’s timely intervention could help stimulate domestic demand and improve credit flow in a fragile economic environment.