The Reserve Bank of India (RBI) may cut interest rates further by 50 basis points (bps) in 2025 and shift its stance from neutral to accommodative, according to a report by Bank of Baroda.

The Reserve Bank of India (RBI) reduced its key repo rate on Friday for the first time since May 2020, aiming to provide stimulus to the sluggish economy, which is projected to grow at its slowest pace in four years during the current fiscal year.

The RBI decided to stick to its “neutral” stance, acknowledging that the global atmosphere remains uncertain due to evolving new dimensions of global trade policy and repeated weather events.