Last Updated:
RBI Governor Sanjay Malhotra said that US tariffs have a minor impact on the Indian economy. Central Bank today cut the repo rate by 25 basis points. Told that inflation is estimated at 2% and growth rate at 7.3%.
New Delhi. When US President Donald Trump decided to impose heavy duties on India, many experts feared that it would have a deep impact on our exports and economy. But Reserve Bank Governor Sanjay Malhotra has a completely different opinion. After the announcement of repo rate cut, he said, “The duty imposed by America has a very minor impact on the Indian economy.” According to him, the strength of the domestic market and continuously increasing activities handle the external pressure to a great extent.
The six-member Monetary Policy Committee unanimously decided to reduce the repo rate by 25 basis points to 5.25 percent. This is the fourth cut since February 2025. Repo rate is the rate at which banks borrow money from the Reserve Bank. Decrease in repo rate directly means that the interest on loans given to consumers may reduce, due to which there is a possibility of increase in liquidity in the market. RBI has earlier reduced the rate by 25 basis points in February and April and by 50 basis points in June.
Inflation is low and growth rate is high
During the announcement, Sanjay Malhotra said that “inflation of 2.2 percent and growth rate of 8.0 percent in the first half of the financial year 2025-26 present a rare favorable situation.” He further said that the inflation estimate for the current year has been reduced to 2 percent, while the growth rate estimate has been increased from 6.8 percent to 7.3 percent. According to him, despite the challenging global environment, the Indian economy is continuously showing strength and is in a position to grow rapidly.
During this period, the weakness of the Indian rupee was also in the news, because this week the currency fell to the level of 90 against 1 dollar. The value of the rupee has fallen by about 5 percent since the beginning of the year and it has become one of the weakest currencies in Asia. Despite this, the Reserve Bank took the step of reducing interest rates, which clearly indicates that it is giving priority to long-term growth.
There has been a decline in exports after America imposed 50 percent duty on India. It was said that half of this duty has been imposed as a penalty for buying oil from Russia. India has reiterated sovereignty in its decisions. Meanwhile, Russian President Vladimir Putin is on a visit to India and is having important discussions with Prime Minister Narendra Modi.
