RBI Monetary Policy Meeting Highlights 2025: Will keep liquidity sufficiently in surplus, says Governor Malhotra

RBI Governor Sanjay Malhotra

In its first bi-monthly monetary policy of FY26, the six-member Monetary Policy Committee (MPC) of Reserve Bank of India decided on 25 bps cut in key interest rates in the backdrop of moderating inflation and the need to stimulate growth as Trump tariffs pose severe challenges to the global economy.

The decision was announced by Governor Sanjay Malhotra on April 9. "MPC voted unanimously to cut repo rate by 25 bps to 6%," said Malhotra.

In February, the MPC slashed the repo rate by 25 basis points to 6.25%. It was the first reduction since May 2020 and the first revision after two-and-a-half years.

The US imposed a 26% tariff on Indian imports and is expected to reduce India’s GDP growth for FY 2025-26 by 20–40 basis points, potentially lowering it to around 6.1% from the RBI’s earlier forecast of 6.7%.

Highlights from Malhotra's post-policy press conference speech:

*We will provide sufficient liquidity for the purposes of monetary policy transmission

*Don't want to give a number on surplus liquidity

*Banks have to be mindful of managing asset-liability

*Don't have any prescription for credit-deposit ratio

*Lifting the economy will be a joint effort of government and RBI

Highlights from Malhotra's speech:

*FY26 has begun on an anxious note

*Recent trade tariff measures a headwind for global economy

*MPC voted unanimously to cut repo rate by 25 bps to 6%

*Sharper than expected food inflation fall given us comfort

*Merchandise exports to be weighed down by global uncertainties

*Don't see high concern for India inflation from tariffs

*Slow down in global growth could entail further softening in commodity and crude oil prices

*Prospects of agriculture sector remain bright, in the light of healthy reservoir levels and robust crop production

*RBI cuts FY26 CPI inflation forecast to 4% from 4.2% earlier

*RBI cuts Jan-Mar 2026 GDP growth forecast to 6.3% from 6.5% earlier

*Liquidity buffer in banking system well above regulatory threshold

*Apr-Jun CPI inflation seen at 3.6% vs 4.5% earlier; Jul-Sep CPI inflation seen at 3.9% vs 4.0% earlier; Oct-Dec CPI inflation seen unchanged at 3.8%; Jan-Mar CPI inflation seen 4.4% vs 4.2% earlier

*Co-lending norms to extend to all regulated entities, loans

*Profitability indicators of banks remain healthy

*To issue comprehensive guidelines on loans against gold

*To issue comprehensive guidelines for non-fund based entities

*To issue comprehensive norms for partial credit enhancement

*Regulatory sandbox to be theme-neutral, on-tap