RBI lowers inflation forecast to 3.7%, cuts rates by 0.5%, and maintains GDP growth outlook at 6.5%.

The Reserve Bank of India (RBI) has lowered its inflation forecast for the fiscal year 2025-26 to 3.7%, down from the previous estimate of 4%, due to easing food and core inflation. The RBI has also maintained its GDP growth forecast at 6.5% for the same period. The central bank reduced the benchmark repo rate by 50 basis points to 5.5% and changed its stance to neutral, signaling a balanced approach to monetary policy. Despite these optimistic projections, RBI Governor Sanjay Malhotra warned of potential risks from weather and geopolitical tensions.