The Reserve Bank of India (RBI) in last monetary policy had cut repo rate by 25 bps to 6.25%, aiming to boost economic activity by making borrowing more affordable. This marked the first repo rate cut in nearly five years.

The US Federal Reserve (Fed) held its target federal funds interest rate in a range of 4.25%-4.50% following its regularly scheduled two-day meeting in March ’25, a widely anticipated outcome. Fed’s projections indicate a somewhat downgraded economic outlook for the next few years, but maintained expectations for two additional rate cuts this year.

The CPI inflation in February ’25 was 3.61%, compared to 4.26% in January ’25. Please note – the CPI inflation figure for March is not yet available.

The central bank took significant steps to boost liquidity in March, injecting a substantial Rs 1 lakh crore into the economy through two Open Market Operations (OMO) purchases, each worth Rs 50,000 crore. It also conducted a $10 billion dollar-rupee buy/sell swap auction with a 36-month tenure. Additionally, RBI is set to inject a massive Rs 80,000 crore into the banking system through fresh open market operations (OMO) in April. This liquidity boost will be divided into four equal tranches of Rs 20,000 crore each, scheduled for April 3, April 8, April 22, and April 29.

1-year, 3-year, and 10-year G-sec yields decreased from February ’25. Notably, the 1-year and 3-year yields indicate convergence. State Bank of India and HDFC bank maintained their 1-year MCLR rates at 9.00% and 9.40%, respectively.