5 key takeaways from RBI MPC June meet: Rate cut, CRR, inflation and more

RBI MPC's latest decisions come amid easing inflationary pressures and continued challenges to economic growth. Here are the highlights from the central bank's June policy meet

The Reserve Bank of India (RBI) Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, concluded its 55th meeting on June 6, announcing a major 50 basis point cut in the key policy repo rate to 5.5 per cent. The committee also shifted its policy stance from ‘accommodative’ to ‘neutral’ and revised its inflation outlook downwards for FY26. The latest decisions come amid easing inflationary pressures and continued challenges to economic growth.

 

The majority of MPC members supported the 50 bps cut, while one member, Saugata Bhattacharya, backed a smaller 25 bps reduction. 

RBI monetary policy meeting june 2025 key takeaways

1: Repo rate cut by 50 bps

The policy repo rate was reduced by 50 basis points to 5.5 per cent, with immediate effect. Consequently, the Standing Deposit Facility (SDF) rate now stands at 5.25 per cent, while both the Marginal Standing Facility (MSF) rate and the Bank Rate have been adjusted to 5.75 per cent. The MPC cited softening inflation and the need to support private consumption and investment as key reasons for front-loading the rate cut. 

While a rate cut had been expected after the RBI shifted its stance to accommodative in the April meeting, experts had anticipated a 25-basis point cut, as the RBI had done in the previous two meetings.

 

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2: Change in policy stance to 'Neutral'

Alongside the rate cut, the MPC changed its policy stance to neutral from accommodative. The committee said that with limited space left for further monetary easing, it will now adopt a data-dependent approach to ensure a balanced response to evolving inflation and growth dynamics.

 

3: Inflation forecast lowered

The headline CPI inflation for FY26 is now projected at 3.7 per cent, revised down from the earlier forecast of 4 per cent made in April 2025. This outlook assumes a normal monsoon and is supported by moderating food inflation, contained core inflation, and softening global commodity prices.

 

4: GDP growth projection maintained at 6.5 per cent

The RBI has maintained its real GDP growth forecast for FY26 at 6.5 per cent. This is based on sustained momentum in private consumption, investment, and services sector activity, despite global uncertainties. 

 

 

5: Cash Reserve Ratio lowered to 3 per cent

Following the MPC meet, the RBI announced a 100 basis point reduction in the Cash Reserve Ratio (CRR), lowering it to 3 per cent from 4 per cent. This reduction was aimed at enhancing liquidity in the banking system and improving the transmission of monetary policy. The reduction will be implemented in four equal tranches of 25 basis points each, commencing from September 6, 2025, and concluding on November 29, 2025. This phased approach is expected to inject approximately ₹2.5 trillion into the banking system by the end of November 2025. 

Growth stable, inflation eases

The MPC noted that while growth remains “lower than aspirations”, inflation has significantly eased from above the upper tolerance band in late 2024 to well below the target by April 2025. The committee emphasised the need to support domestic growth through policy tools amid heightened global uncertainty.

 

The next meeting is scheduled from August 4 to 6, 2025.