RBI cuts repo rate by 50 bps to 5.50 pc

The Reserve Bank of India (RBI) on Friday in its second bi-monthly monetary policy of FY26. cut the repo rate by 50 basis points (bps) to 5.50 pc from 6.00 pc earlier. This is the central bank’s third consecutive repo rate cut.

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RBI Governor Sanjay Malhotra-led Monetary Policy led committee decided to cut the Cash Reserve Ratio (CRR) by 100 basis points (bps) to 3% from 4% earlier releasing Rs 2.5 lakh crore of lendable resources to the banking system.

The MPC also decided to change the policy stance to ‘Neutral’ from ‘Accommodative’ in a bid to support economic growth. This RBI's rate cut decision is expected to stimulate borrowing and investment, leading to a higher growth rate. The policy panel retained growth estimate at 6.5 per cent but projected a lower inflation of 3.7 per cent in the current fiscal.