RBI's Strategic Rate Cut: A Move to Revitalize Growth

Reserve Bank Governor Sanjay Malhotra supports a 25 basis points reduction in the benchmark interest rate to boost private consumption and corporate investment. The Monetary Policy Committee's decision aims to nurture domestic demand amidst an uncertain global environment, maintaining an accommodative stance for future growth.

In a strategic move to enhance economic growth, Reserve Bank Governor Sanjay Malhotra endorsed a 25 basis points cut in the repo rate, aligning with fellow members of the Monetary Policy Committee (MPC).

The committee, led by Malhotra, reduced the short-term lending rate to 6 percent on April 9, reflecting a similar reduction strategy implemented in February. This decision aims to invigorate private consumption and foster a revival in private corporate investment.

With the inflation rate aligning closely with the 4 percent target and growth at a moderated pace, the monetary policy must continue to support domestic demand amidst a volatile global economic landscape. The next MPC meeting is slated for June 2025.

(With inputs from agencies.)