Current Affairs - Economy - Discussion

The Monetary Policy Committee reduced the repo rate by 25 basis points, bringing it down to 5.25%. This rate cut comes at a time when inflation has eased significantly to 2.2% and GDP growth in Q2 has reached a robust 8%, creating a favourable economic environment often described as a “goldilocks” phase. With retail inflation remaining below 4% for several months, the RBI aims to support economic activity while ensuring price stability. Additionally, planned liquidity measures such as ₹1 lakh crore OMO purchases and a $5 billion USD/INR swap are expected to maintain adequate liquidity in the financial system.