<h1>RBI Cuts Policy Rate to 6.25% After Five Years to Boost Economy, Aligns with Union Budget's Tax Breaks</h1> The Reserve Bank of India (RBI) reduced the policy rate by 25 basis points to 6.25%, marking the first rate cut in nearly five years under the new Governor. This decision by the Monetary Policy Committee aims to support the slowing economy, following a series of rate hikes since May 2022. The rate cut aligns with the recent Union Budget, which introduced significant tax breaks for the middle class to stimulate consumption. The Finance Ministry emphasized the need for fiscal and monetary policies to work together, highlighting improved fiscal deficit projections for the upcoming fiscal years.