The Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points to 5.25%, balancing record-low inflation with a sharply weakening rupee and stronger-than-expected economic growth. The cut follows two consecutive policy meetings in which the central bank kept rates unchanged.

RBI Governor Sanjay Malhotra had signalled possible rate reductions last month, noting that there was “definitely scope” for easing. Since then, India’s economy has remained resilient despite steep 50% US tariffs, while the rupee has dropped to a record low below ₹90 per dollar, complicating the central bank’s policy choices.

A Bloomberg survey of 44 economists showed that most expected a 25-basis-point rate cut, as inflation remains well below the RBI’s 4% target. However, major institutions—including C

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