The RBI Governor Sanjay Malhotra delivered the first interest rate cut in nearly five years. The RBI MPC reduced the repo rate cut to 6.25% from 6.50%.

RBI had last reduced the repo rate by 40 basis points to 4 per cent in May 2020 to help the economy tide over the crisis following the outbreak of the Covid pandemic and subsequent lockdown.

The rate cut comes even as the past four headline inflation prints were above 5 per cent. RBI Governor Sanjay Malhotra noted that inflation is expected to decline. This was the first MPC meeting since Malhotra took over as RBI governor in December last year.