Wed Apr 09 04:12:45 UTC 2025: ## RBI Expected to Cut Repo Rate Amidst Global Uncertainty and Trump Tariffs
**Mumbai, April 9, 2025** – The Reserve Bank of India (RBI) is set to announce its first bi-monthly monetary policy today, with widespread expectations of a 25 basis points reduction in the repo rate. This comes amidst a backdrop of moderating inflation, the need to stimulate growth, and the introduction of significant new tariffs by the U.S.
RBI Governor Sanjay Malhotra will unveil the policy decision at 10:00 AM. The Monetary Policy Committee (MPC), which began its deliberations on Monday, is anticipated to lower the repo rate to 6%, following a 25 basis point cut in February. This would mark the third rate reduction since May 2020.
The announcement coincides with the implementation of a 26% reciprocal tariff on Indian goods imposed by U.S. President Donald Trump, adding a layer of complexity to the RBI’s decision. Several financial institutions, including HSBC and Goldman Sachs, predict a 25 basis point cut, citing factors such as moderating domestic activity, benign inflation, and a decline in Brent crude oil prices. Some experts, however, advocate for a more significant 50 basis point reduction to counteract the potential negative impacts of the tariffs on global growth and spur investment.
While India’s inflation is declining, concerns remain regarding the ripple effects of a global slowdown stemming from the new tariffs. Experts acknowledge the need for monetary reflation to support growth, suggesting that the RBI’s actions will likely involve both rate cuts and maintaining surplus liquidity. The potential benefits of a rate cut are anticipated to be felt across various sectors, particularly in real estate and the electric vehicle industry. The MPC’s decision will be closely watched as it will influence borrowing costs, investment decisions, and overall economic activity in India.
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