RBI Cuts Rates By 125 BPS Since Feb'25: Governor Explains What It Means For Growth And Loans

The RBI has cut interest rates by 125 basis points since February 2025, bringing the repo rate down to 5.25% — a move that stands out at a time when India’s economic growth remains strong. In an exclusive interaction with  India Today's Raj Chengappa and MG Arun, RBI Governor Sanjay Malhotra says the decision was driven by low and stable inflation, unlike earlier rate cuts that were meant to revive slowing growth. With inflation expected to remain around 3.5%, the RBI felt real interest rates were too high. The Governor says lower rates are already helping boost spending and borrowing, especially in home loans, personal loans and MSME credit, where interest rate transmission is faster. The aim, he adds, is to support demand, growth and job creation, while future policy moves will remain data-dependent.  The Governor says lower rates are already helping boost spending and borrowing, especially in home loans, personal loans and MSME credit, where interest rate transmission is faster. The aim, he adds, is to support demand, growth and job creation, while future policy moves will remain data-dependent.