Reserve Bank of India Cuts Repo Rate to 5% Amid 6.7% Growth Forecast

RBI cut the repo rate by 25 basis points, bringing it to 5 percent, marking the latest move in a series of dovish steps aimed at sustaining growth. The decision follows two prior meetings that left rates unchanged.

Governor Sanjay Malhotra said the central bank will keep the FCNR(B) scheme open and emphasized that the cut reflects confidence in inflation staying near target while supporting credit flow. He said foreign currency deposits will stay open to NRIs.

Economic Outlook projects GDP growth at 6.7 percent for the current fiscal year, with the Monetary Policy Committee noting stable inflation and a “balanced” external sector as reasons for a steady rate path into FY27. The committee said inflation should stay within the 4‑plus‑2 band despite external pressures.

Market Analysts such as SBI predict no further rate hikes this year, citing the RBI’s warning about global uncertainties and the need to avoid tightening that could curb the recovery. Analysts note that a stable monetary stance could bolster investor confidence and support the credit expansion.