Mumbai, Apr 9 (PTI) The RBI on Wednesday slashed key interest rate by 25 basis points, for the second time in a row, to support a shuttering economy hit by reciprocal tariffs imposed by the US.

Following the rate cut, the key policy rate eased to 6 per cent providing relief to home, auto and corporate loan borrowers.

In its last policy in February, RBI had trimmed repo rate by 25 basis points to 6.25 per cent. This rate came after previous rate reduction in May 2020. The last revision of rates happened in February 2023 when the policy rate was hiked by 25 basis points to 6.5 per cent.

The Monetary Policy Committee (MPC) unanimously decided to slash the policy rate by 25 basis points to 6.25 per cent, RBI Governor Sanjay Malhotra said.

RBI has lowered the GDP growth forecast to 6.5 per cent from earlier projection of 6.7 per cent due to global uncertainties.

Last week, US President Donald Trump had announced a hefty 26 per cent reciprocal tariffs on Indian imports, effective April 9. PTI DP NKD CS ANZ HVA

Monetary policy rate cut eases borrowing costs and accompanies downgraded growth forecast amid trade tensions. The central bank reduced the policy rate by twenty-five basis points in a consecutive move to ease borrowing costs for household and corporate loans, a unanimous Monetary Policy Committee decision aimed at supporting an economy weakened by reciprocal tariffs and global uncertainties; the bank also lowered its GDP growth projection in response to these external pressures.