RBI Governor Sanjay Malhotra initiated his term with a 25 basis point repo rate cut, reducing it to 6.25%. This move contrasts sharply with his predecessor Shaktikanta Das' focus on inflation control.

The MPC under the new RBI governor will have to walk a tightrope between taming inflation and boosting economic growth. India’s GDP growth in Q2 FY25 slipped to a seven-quarter low of 5.4%. The monetary policy committee forecasts India’s gross domestic product (GDP) to grow at 6.7% in the financial year 2025-26.

The latest decision brings the repo rate from 6.50 per cent to 6.25 per cent. Sanjay Malhotra, the newly appointed RBI Governor, chaired his first Monetary Policy Committee (MPC)