Overview of the RBI MPC Meeting – April 2025

The Reserve Bank of India (RBI) has begun its first Monetary Policy Committee (MPC) review for the financial year 2025–26. All eyes are on the likely decision regarding a 25 basis point (bps) rate cut, possibly bringing the repo rate down from 6.25% to 6%.

This bi-monthly meeting, held from April 7 to April 9, comes at a time when India is tackling the dual challenge of moderating inflation and external economic headwinds, including rising global tariffs and a complex liquidity environment.

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Repo Rate Cut: What Are the Expectations?

Economists predict a likely 25 bps reduction in lending rates.

Why a Rate Cut?

According to a Reuters poll, 90% of economists (54 out of 60) expect the RBI to slash the repo rate by 25 basis points, bringing it down to 6%. The February MPC meeting had already trimmed the rate from 6.50% to 6.25%, citing slowing inflation and the need to support economic growth.

"We anticipate a 25 bps cut aimed at supporting key sectors and driving economic recovery," said Atul Monga, CEO of BASIC Home Loan.

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Global Factors: How External Pressures Are Shaping RBI's Policy

US Tariff Impact

The U.S. recently imposed a 26% tariff on Indian imports, potentially dragging India’s GDP by 20–40 basis points, revising the growth forecast from 6.7% to nearly 6.1%. Economists believe this will pressurize the RBI to maintain an accommodative stance.

Bajaj Broking noted: "Global economic volatility and trade frictions make it imperative for the RBI to focus on stimulating domestic growth."

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Key Factors the MPC Is Watching

1. Inflation Trends

Though inflation has moderated compared to previous quarters, food and fuel prices continue to fluctuate. The RBI’s stance will likely balance the risks of inflation resurgence.

2. GDP Outlook

India’s economic growth is forecast to slow, partly due to global uncertainties. A rate cut could offer much-needed relief to businesses and consumers, encouraging credit flow and investments.

3. Liquidity Management

Policy tweaks in liquidity tools like SDF (Standing Deposit Facility) and MSF (Marginal Standing Facility) could also accompany the rate cut to ensure banking sector stability.

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New Leadership: Deputy Governor Poonam Gupta Joins the Table

The appointment of Dr. Poonam Gupta as the new RBI Deputy Governor is another significant development. An advocate of flexible exchange rate regimes and inflation targeting reforms, her inputs are expected to influence future rate policy trajectories.

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RBI MPC Meeting Schedule and LIVE Announcement

The RBI MPC decision will be officially announced on Wednesday, April 9, at 10:00 AM, followed by a statement from RBI Governor Sanjay Malhotra.

How to Watch Live?

You can watch the RBI MPC meeting outcome LIVE on:

• ET NOW Live TV

• RBI’s Official YouTube Channel

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What It Means for You: The Real-World Impact of a Rate Cut

For Borrowers:

A cut in repo rates could result in lower EMIs on home, auto, and personal loans, providing relief to millions of consumers.

For Investors:

Markets may react positively, especially banking and real estate stocks. However, bond yields may dip due to easing interest rates.

For Businesses:

Easier access to credit and lower financing costs could boost capital expenditure and hiring across sectors.

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Conclusion: RBI at a Crossroads Amid Global Uncertainty

The April 2025 RBI MPC meeting is pivotal in setting the tone for India’s economic direction in FY 2025–26. With inflation cooling and global challenges mounting, a rate cut seems not just likely—but necessary. However, the committee’s tone, forward guidance, and liquidity actions will be equally important to decode the broader macroeconomic outlook.