New Delhi, Feb. 7 -- The Reserve Bank of India's monetary policy committee unanimously decided to cut the repo rate by 25 basis points to 6.25%-the first in nearly five years-chiefly to take advantage of easing inflation to spur economic growth.

Although India's economic growth is expected to recover, it is likely to be much lower than last year, RBI governor Sanjay Malhotra said in his first policy review following his appointment in December. Inflation dynamics have opened space for rate easing, he said.

RBI pegged its inflation target for 2025-26 at 4.2% while retaining the forecast for FY25 at 4.8%. Its rate-setting committee maintained its policy stance as "neutral", signalling potential for further rate cuts.

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