Rbi Mpc Meeting Live April 2025: Key Highlights as RBI Cuts Repo Rate by 25 bps, Shifts Stance to Accommodative

Reserve Bank of India Monetary Policy Committee (MPC) released its first policy resolution of the financial year 2025-26 in the wake of softening inflationary pressures and a mixed global outlook. The RBI conducts six bi-monthly reviews each financial year to evaluate the state of the economy, focusing on factors like interest rates, inflation trends, and money supply. Check the full RBI MPC meeting schedule for the upcoming meetings here.

In his speech, Governor Sanjay Malhotra gave highlights about inflation projections, GDP expectations, regulatory news, and overall economic prospects. Let's take an overview of RBI MPC April 2025 Meeting key takeaways:

भारतीय मार्केटमध्ये इन्व्हेस्ट करा आणि 5paisa सह भविष्यातील क्षमता अनलॉक करा!

आत्ताच अकाउंट उघडा

1. RBI Cuts Repo Rate by 25 bps; Stance Turns Accommodative

The MPC unanimously voted to cut the repo rate by 25 basis points to 6%, effective immediately. Additionally, the Standing Deposit Facility (SDF) rate was reduced to 5.75%, and the Marginal Standing Facility (MSF) rate was lowered to 6.25%.

In a notable shift, the policy stance has been changed from 'neutral' to 'accommodative'. RBI Governor, Sanjay Mehta said, "On the inflation front, while sharper than expected decline in food prices has given us comfort, we remain vigilant to possible risks from global uncertainty and weather disruptions. MPC noted that inflation [is] below the target currently, supported by huge fall in food prices.

Moreover, there is decisive improvement in inflation outlook. As per projections, there is now greater confidence of durable alignment of headline inflation with target of 4% over 12 months horizon." 

2. Inflation Outlook Improves Significantly

Food inflation outlook has turned “decisively positive.” Headline inflation for FY26 is estimated at 4%, which was 4.2% in the February projection.

Quarter-by-quarter inflation projections are as follows:

• Q1: 3.6%
• Q2: 3.9%
• Q3: 3.8%
• Q4: 4.4%

Risks remain evenly balanced.

3. GDP Growth Projections Trimmed Slightly

RBI has slightly lowered its GDP growth forecast by 20 basis points, citing global trade tensions and policy uncertainties.

Updated GDP growth projections:

• Q1: 6.5%
• Q2: 6.7%
• Q3: 6.6%
• Q4: 6.3%

Risks are again evenly balanced.

4. Manufacturing, Trade, and Exports

Governor Sanjay Malhotra in the RBI MPC Meeting April 2025 noted that early indications of recovery are visible in manufacturing activity. Still, he cautioned that increased tariffs and global trade tensions have the potential to be adverse for India's merchandise exports.

"Dent on global growth due to trade friction will impede domestic growth also; Higher tariffs shall have a negative impact on net exports." – Governor Sanjay Malhotra.

Despite this, services exports and remittance inflows are likely to be steady and continue to offset some of the trade deficit.

5. FDI and External Borrowings

While gross inflows of FDI have been healthy, net FDI has eased owing to higher repatriation and outward investment. On the other hand, external commercial borrowings (ECBs) have seen increased inflows in relation to last year.

6. Six New Measures on Banking and Payments Regulation

In the April 2025 RBI MPC Meeting, six additional regulatory measures were announced, aimed at deepening financial markets and improving access to credit:

• Securitisation of stressed assets through a modified, market-based mechanism.
• Extension of co-lending guidelines to all regulated entities and all loan categories
• NPCI to set UPI transaction limits for person-to-merchant (P2M) payments (current limit remains ₹2 lakh).
• No changes in UPI limits for person-to-person (P2P) transactions.
• Regulatory sandbox to be made theme-neutral and on-tap.
• Regulations on prudential norms for gold loans. Shares of मुथूट फायनान्स, आयआयएफएल, मण्णपुरम, fell around 10% after the RBI announced plans for stricter gold loan norms and an expanded co-lending framework.
   

7. Final Word from the Governor

Governor Sanjay Malhotra concluded with an overview of the global and domestic macroeconomic scenario. He noted that the world economy is at present going through a period of unprecedented uncertainty. The difficulty of extracting useful signals from a noisy and volatile world makes policy-making more challenging. Nevertheless, he stressed that monetary policy can continue to act as a crucial anchor, keeping the economy on an even and balanced path.

He said, "As I mentioned earlier, the domestic growth inflation projection demands monetary policy to the core growth supported while being watchful on the inflation front. We are aiming for a non inflationary growth that is built on the foundations of an improved demand and supply response and sustained macroeconomic balance. As before we remain agile and the decisive response and put in place policies that are clear, consistent, credible and in the best interest of the economy."

पुढे पाहत आहे

The RBI MPC Meeting April 2025 outlined a pivotal shift in the monetary policy outlook going forward this year, with a 25 basis point cut in the repo rate to 6% and a change in stance from ‘neutral’ to ‘accommodative’.

This move reflects the central bank’s confidence in the improving inflation outlook in India, supported by a sharp drop in food prices - further coming in as a aid.

Despite a dip in net FDI due to higher repatriation, strong gross inflows and robust remittance receipts are expected to help offset the trade deficit. The RBI reaffirmed its commitment to ensuring macroeconomic stability while supporting non-inflationary growth.