Current Affairs - Economy - Discussion

The Reserve Bank of India (RBI) reduced the repo rate by 25 basis points (bps), bringing it down to 6.25%. This marks the first rate cut in 57 months, reflecting a shift in the RBI’s policy stance after a series of rate hikes since 2022. The move is aimed at supporting economic growth while keeping inflation in check. A lower repo rate typically results in reduced borrowing costs for businesses and consumers, stimulating demand in key sectors such as housing and automobiles. Despite the cut, the RBI remains cautious due to global uncertainties and inflation risks.