Mumbai, April 9 || RBI Governor Sanjay Malhotra on Wednesday announced a 25 basis cut in the policy rate from 6.25 per cent to 6 per cent and change in monetary policy stance from neutral to accommodative to accelerate economic growth.
The RBI Governor said that the decision to cut the repo rate has been taken unanimously by the Monetary Policy Committee (MPC) keeping in mind the macroeconomic and financial conditions and outlook.
Malhotra said that the MPC has decided to change the monetary policy stance from neutral to accommodative, which will pave the way for easing the monetary policy with more liquidity injections to accelerate economic activity.
This will replace the Neutral stance which requires neither stimulation nor curbs on liquidity, he explained.
The RBI Governor further stated that while inflation has come down in the Indian economy, the central bank would remain vigilant due to the global risks posed by the hike in US tariffs.
He said that the RBI will ensure adequate liquidity in the banking system.
After the repo rate cut, the Standing Deposit Facility, the SDF rate, under the liquidity adjustment facility, will stand adjusted to 5.75 per cent, and the Marginal Standing Facility rate, or the MSF rate, and the bank rate will stand adjusted to 6.25 per cent, Malhotra said.
This is the second consecutive 25 basis reduction in the repo rate after it was reduced in February for the first time since May 2020.