RBI May Cut Interest Rate by 25 bps in April Policy Review

RBI Hints at April Rate Cut as Inflation Eases, Growth Holds Ground

As India’s inflation cools and economic activity stays robust, the Reserve Bank of India (RBI) is expected to announce another rate cut during its upcoming monetary policy meeting on April 9. A 25 basis points reduction in the repo rate — currently at 6.25% — is widely anticipated.

Retail inflation slipped to 3.61% in February, comfortably within the RBI’s tolerance band. Meanwhile, India’s economy grew 6.2% in the third quarter of FY24, beating many forecasts and reinforcing hopes of continued momentum.

Economists suggest the central bank may use this window of stability to provide some support to borrowers and businesses. “With price pressures easing and growth steady, the RBI has a clear runway to tweak rates without raising red flags,” said a senior financial analyst.

The global outlook, however, brings its own concerns. Ongoing trade tensions — particularly the U.S. administration’s tariff stance — could impact exports in the months ahead. A rate cut might help cushion any spillover effects.

The policy committee is slated to meet from April 7 to 9, with a decision expected on the final day. A reduction in rates would mark the second such move in two months — a sign that the central bank is cautiously shifting towards a growth-supportive stance.

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