The RBI’s Monetary Policy Committee on Friday cut the repo rate by 25 bps to 5.25% in Mumbai. The move follows stronger growth and cooling inflation, marking the first rate cut since June 2025.

BulletsIn

• Repo cut 25 bps → new rate 5.25%
• First cut after two pauses; total 2025–26 cuts now 100 bps
• Inflation at 2.2%, growth at 8% → “rare Goldilocks period”
• FY26 GDP forecast raised to 7.3% from 6.8%
• CPI estimate lowered to 2% from 2.6%
• EMIs likely to fall for home, vehicle, MSME, corporate loans
• MPC vote: 6–0 for rate cut; 5–1 for neutral stance
• Growth expected to moderate due to high base effect
• Rupee breached 90; RBI says no target level, only curbs excess volatility
• RBI announces ₹1 lakh crore OMO purchases + $5 bn USD/INR swap
• Inflation projections cut sharply for Q3, Q4 FY26, and Q1 FY27