The Reserve Bank of India’s (RBI) 25-basis-point repo rate cut to 5.25%—delivered unanimously by the Monetary Policy Committee (MPC) this week—marks one of the rare instances globally where a central bank has eased policy despite strong economic growth and exceptionally low inflation, according to SBI Research.

In its latest Ecowrap, the research unit said the decision reflects RBI’s assessment of emerging uncertainties in a volatile global environment, even as India’s macroeconomic fundamentals remain robust.

The MPC also retained its neutral stance. Following the decision, the Standing Deposit Facility (SDF) rate stands at 5.00%, the Marginal Standing Facility (MSF) and Bank Rate at 5.50%, while the Cash Reserve Ratio (CRR) remains unchanged at 3%.

Inflation forecasts mark deep down

See Full Page