Mumbai . Katrina Elll, Economic Research Director of Moody’s Analytics, said on Wednesday that the Reserve Bank of India (RBI) has done the right thing by taking steps according to market expectations in difficult times. He believes that the central bank cuts the repo rate by cutting 25 basis points to 6 percent and the move to make the monetary policy’s stance ‘Acomoderative’ has been taken at the right time, because at present people do not want any surprise.
“Uncertainty has a deep negative effect on economies and has widespread effects. Last week, the tariff threats of the US government have seen amazing fluctuations in bonds, currency and equity markets due to the tariff threats of the US government.
He said, “In this period of ups and downs, the RBI’s predicted response will help the market to avoid more volatility.”
RBI MPC has reduced the repo rate by 25 basis points to 6 percent, which was 6.25 percent earlier.
This is the second consecutive time in 2025, when the central bank has cut the repo rate. Earlier in February, RBI MPC reduced the repo rate by 25 basis points.
In addition, the central bank has changed the attitude of monetary policy from ‘Neutral’ to ‘Acomoderative’. Acomoderative means that the central bank can keep the monetary policy soft in the coming time.
Moody’s believes that the RBI may cut the repo rate by up to 75 basis points in the current calendar year.
Due to increased uncertainty due to American reciperoching tariff, RBI has reduced India’s GDP growth estimate for FY 2025-26 to 6.5 percent to 6.5 percent, earlier 6.7 percent.
According to the central bank, the GDP growth rate may be 6.5 percent in the first quarter of FY 26, 6.7 percent in the second quarter, 6.6 percent in the third quarter and 6.3 percent in the fourth quarter.
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