In support of a resurgence in private corporate investment and private spending, Reserve Bank Governor Sanjay Malhotra and the other five members of the rate-setting panel voted earlier this month for a 25 basis point drop in the repo rate.
On April 9, Governor Malhotra’s Monetary Policy Committee (MPC) lowered the short-term lending rate by 25 basis points to 6%. A comparable cut was made in February. The MPC’s next meeting is set for June 4-6, 2025.
Monetary policy must support domestic demand impulses to further boost the growth momentum while consumer price inflation is firmly within its target range of 4% and GDP is still modest and recovering. According to the minutes of the MPC meeting that the RBI issued on Wednesday, this is especially true in light of the uncertain global environment that has increased the negative risks to GDP.
Malhotra had stated that it would encourage a resurgence of private corporate investment activity and boost private spending. “Money policy must be accommodating going forward as well, given the changing growth-inflation trajectories,” he stated.
