RBI Slashes Repo Rate by 50bps Amid Global Economic Volatility

The Reserve Bank of India delivered an aggressive 50 basis-point rate cut, exceeding market expectations, as muted inflation allowed policymakers to prioritize economic growth. This marks the third consecutive reduction, bringing cumulative easing to 100bps since February.

Governor Sanjay Malhotra signaled constrained policy flexibility by shifting the monetary stance from 'accommodative' to 'neutral'. Emerging market central banks face mounting challenges, he noted, with capital FLOW volatility and exchange rate pressures limiting their ability to counter global spillovers.

"Price stability preserves purchasing power," Malhotra emphasized during the announcement, highlighting India's relative economic resilience. The RBI concurrently reduced bank reserve requirements, injecting additional liquidity into the financial system.