New Delhi, April 6: The Reserve Bank of India (RBI) is set to hold its first monetary policy review meeting of the 2025-26 financial year, starting on Monday. The outcome of the three-day meeting will be announced on Wednesday morning at 10 am.
Each year, the RBI conducts six bimonthly meetings to review interest rates, money supply, inflation forecasts, and other key economic indicators. The remaining meetings for the year are scheduled for June 4-6, August 5-7, September 29-October 1, December 3-5, and February 4-6. The RBI's Monetary Policy Committee (MPC) is composed of six members—three from the RBI, including the Governor, and three external members appointed by the central government.
The primary goal of the MPC is to ensure price stability while promoting economic growth. The RBI aims to keep inflation within the 2-6% range, with a medium-term target of 4%. While inflation has been a concern globally, including for advanced economies, India has managed to keep its inflation relatively well-controlled. In its previous meeting on February 7, the RBI's MPC unanimously decided to lower the policy rate by 25 basis points, reducing the repo rate from 6.5% to 6.25%. This marked the first rate cut in nearly five years.
The repo rate is the interest rate at which the RBI lends to commercial banks. Since May 2022, the RBI had kept the repo rate at 6.5% as part of its strategy to control inflation. Raising interest rates is a standard monetary policy tool used to curb excessive demand in the economy, which in turn helps reduce inflationary pressures.
Bank of Baroda recently predicted that the RBI's MPC will lower the repo rate by a total of 75 basis points in 2025. According to Care Edge Ratings, the RBI is likely to shift its focus from inflation concerns to supporting economic growth in the upcoming review. The agency anticipates that the MPC will implement another 25-basis-point cut in the repo rate during the April 7-9 meeting.
(With ANI inputs)
