RBI Adjusts GDP Growth Projections Amidst Global Uncertainties

The Reserve Bank of India (RBI) has revised its GDP growth projections for FY 2025-26 downwards from 6.7% to 6.5%, citing global economic uncertainties exacerbated by US President Donald Trump's tariffs. RBI Governor Sanjay Malhotra humorously remarked, "I'm Sanjay, but I'm not the Sanjay of Mahabharata," highlighting the unpredictability of the repo rate's future trajectory.

Monetary Policy Committee Cuts Repo Rate

The RBI's Monetary Policy Committee (MPC) has cut the repo rate by 25 basis points to 6.5%, marking the second rate cut this year. The central bank has also shifted its policy stance from neutral to accommodative, indicating potential future rate cuts to support economic growth.

Joint Efforts to Counter Economic Challenges

Governor Malhotra emphasized the collaborative effort required between the government and the RBI to navigate the emerging global economic environment. He acknowledged the government's measures, including increased capex and tax rebates, as crucial steps towards sustaining growth.

Warning Against Heightened Uncertainties

The RBI governor warned of increased uncertainties due to ongoing tariff wars, which pose new challenges for global growth and inflation. The RBI aims to support non-inflationary growth through clear, consistent, and credible policies.