MPC delivers again, takes 2025 rate cut tally to 125 bps

The MPC - which Malhotra chairs — has lowered the policy repo rate by 125 bps in 2025.

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“The MPC noted that headline inflation has eased significantly and is likely to be softer than the earlier projections, primarily on account of the exceptionally benign food prices,” said Malhotra, who will complete one year at the Mint Road next week. He stressed that underlying inflation pressures are even lower as the impact of increase in price of precious metals on retail inflation is about 50 bps.

Except the panel's external member Ram Singh, all other members decided to keep the monetary policy stance neutral. Singh wanted the stance to be changed to accommodative.

India’s growth, the governor said, remained resilient, but is expected to soften somewhat, even as the RBI raised its FY26 growth forecast from 6.8 per cent to 7.3 per cent. “The growth rate of about 8 per cent in the first half will not be sustained at the same level,” Malhotra said.