Repo rate cut: RBI Governor Malhotra hints at more in coming months after two back-to-back cuts
The Hindu
RBI Governor hints at rate cut, changes stance to 'accommodative', may lower EMIs, next policy on June 6.
After effecting two back-to-back 25 basis points rate cuts, Reserve Bank Governor Sanjay Malhotra on Wednesday (April 9, 2025) hinted at another reduction in key policy rate by changing the central bank’s monetary stance to ‘accomodative’ from ‘neutral’, which may further lower EMIs for consumers.
The bi-monthly monetary policy is scheduled to be announced on June 6, 2025.
Also read | The repo rate in India
Unveiling the April monetary policy after meeting of the Monetary Policy Committee (MPC), Governor Malhotra said that in the context of the RBI, the stance of monetary policy signals the intended direction of policy rates going forward.
“Accordingly, with respect to the policy rate, which is the mandate of the MPC, today’s change in stance from ‘neutral’ to ‘accommodative’ means that going forward, absent any shocks, the MPC is considering only two options — status quo or a rate cut,” he said.
He also clarified that the stance should not be directly associated with liquidity conditions.
Dwelling on the monetary policy stance, Mr. Malhotra said that from a cross-country perspective, monetary policy stance is typically characterised as accommodative, neutral or tightening.
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