The Reserve Bank of India’s (RBI) central board has sanctioned the budget for FY 2025-26, marking a strategic roadmap for the institution’s operations and priorities for the next year.
During its 614th meeting convened on March 21, 2025, in Thiruvananthapuram, presided over by Governor Sanjay Malhotra, the board also considered RBI operations for FY24-25. The board discussed the prevailing global and domestic economic situation, focusing on geopolitical events and trends in financial markets and related challenges.
In a statement released after the meeting, the RBI highlighted its commitment to tackling emerging challenges while ensuring sustainable growth. The board also reviewed the RBI’s activities for the ongoing fiscal year 2024-25 and approved its budget for 2025-26. This approval is a significant step in planning and executing policies that align with India’s broader economic goals.
One of the major developments being discussed was the recent RBI policy rate reduction. During its recent bi-monthly monetary policy review, the central bank lowered the policy rate by 25 basis points to 6.25%, the first rate reduction in five years. This follows a series of rate hikes that started in May 2022, totaling 250 basis points in six successive increases. The previous hike was in February 2023 when the rate was increased to 6.5%. The pause in rate hikes in April 2023 signaled a shift in monetary policy direction, aimed at balancing inflation control with economic growth.
The rate cut reflects RBI’s efforts to support economic recovery while maintaining inflation within manageable levels amidst global uncertainties. The next Monetary Policy Committee meeting is scheduled for April 7-9, where further deliberations on monetary policy are expected.
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Deputy Governors M. Rajeshwar Rao, T. Rabi Sankar, and Swaminathan J., as well as other central board directors such as Satish K. Marathe, Revathy Iyer, Sachin Chaturvedi, and Ravindra H. Dholakia, were among the key figures present at the meeting. Their combined experience helped in discussions aimed at resolving domestic and global economic issues.
The RBI’s proactive approach towards the country’s growth highlights its focus on navigating complex economic conditions while fostering stability and sustainability. By addressing both immediate challenges and long-term goals, the central bank continues to play a pivotal role in shaping India’s financial future amidst an evolving global scenario.
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