The Reserve Bank of India on Friday slashed the policy repo rate by 50 basis points to 5.50%, surprising markets with its most aggressive move in over three years. The third rate cut in 2025 brings cumulative easing to 100 basis points, but more telling was the Monetary Policy Committee’s decision to shift its stance to neutral from accommodative, signalling that the door to further cuts remains open, but the threshold to cut again has risen.Governor Sanjay Malhotra said the MPC felt front-loading the rate cuts was appropriate, given the window provided by disinflation and the need to support momentum in a still-fragile global environment.
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