The decision by RBI on Friday to reduce its key rate for the first time in five years comes less than a week after the government unveiled historic tax cuts in Budget 2025

The six-member monetary policy committee (MPC) of the Reserve Bank of India (RBI), led by governor Sanjay Malhotra, on Friday reduced the policy repo rate by 25 basis points to 6.25 per cent from 6.5 per cent.

Economists expect another rate cut at the MPC's next meet in April, even as the depth of the ongoing rate cut cycle will be dependent on GDP growth.