RBI's Monetary Policy Committee cut the repo rate by 25 basis points to 6% in April 2026, marking the first rate reduction after 18 months of pause. The unanimous decision came amid softening inflation at 4.1% and growth concerns in manufacturing sector. Standing deposit facility adjusted to 5.75%, marginal standing facility to 6.25%. RBI maintained accommodative stance while projecting GDP growth at 6.8% for FY27. Decision aims to support credit growth and investment demand.

The April 2026 MPC decision represents a significant shift from RBI's prolonged hawkish stance maintained since early 2023. With retail inflation consistently below the 4% target for three consecutive months and core inflation at multi-year lows, the committee gained confidence to support growth. The manufacturing PMI declining to 52.1 and credit growth moderating to 11.2% provided additional justification. This rate cut directly impacts transmission through banks' MCLR adjustments, expected within 30-45 days. The decision strengthens government's capex-led growth strategy while maintaining price stability credibility. Foreign portfolio investors responded positively, with ₹15,000 crore inflows in April 2026. The accommodative stance signals potential for further cuts if global commodity prices remain stable and fiscal deficit targets are met.