FX.co ★ India Cuts Repo Rate, Revises Down GDP Forecast

The Reserve Bank of India (RBI) reduced its key repo rate by 25 basis points, settling at 6%, during its April session. This marks the second successive meeting with a 25 basis-point cut, in line with market expectations. The adjustment has brought borrowing expenses to their lowest since November 2022, influenced by decreasing inflation rates amid a backdrop of decelerating economic growth and rising trade tensions. As for the economic forecast, the RBI adjusted its growth projections for the fiscal year 2025-26, lowering the GDP growth estimate to 6.5% from an earlier forecast of 6.7%. Anticipations for quarterly growth were pegged at 6.5% for Q1, 6.7% for Q2, 6.6% for Q3, and 6.3% for Q4. Concurrently, the inflation forecast was marginally decreased to 4% from 4.2%, keeping within the central bank's target range of 2-6%.