Wed, 09 Apr 2025

Wed, 09 Apr 2025 India cuts rates as Trump's tariffs put growth at risk

India's central bank has cut interest rates by 0.25% and lowered its growth projections for this year.

* India's central bank, RBI, has cut interest rates by 0.25% to 6% amid a slowdown in growth due to Trump's tariff announcements.
* The RBI has also lowered its GDP growth projections for this year and next year from 6.7% to 6.5%.
* The RBI shifted its monetary policy stance to "accommodative" from "neutral", indicating that it is open to further rate cuts to stimulate the economy.
* Economists are predicting more softening of interest rates, with some expecting up to a 1% cut in the cycle.
* India's growth momentum has lost steam due to Trump's global trade war, and moderating inflation will give the RBI room to slash borrowing costs.
* Tariffs on Indian goods exported to the US could hurt India's trade, with HSBC estimating that GDP could take a direct hit of up to half a percent this financial year.
* The final impact on India's trade will depend on how long the tariff structure lasts and how other countries retaliate or negotiate with the US.
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