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RBI MPC meeting highlights: MPC continues to monitor incoming data, says Governor Sanjay Malhotra

RBI MPC meeting June 2025 highlights: MPC felt frontloading of rate cut will boost growth, RBI Governor Sanjay Malhotra said today; catch all the LIVE updates here

BS Web Team New Delhi

RBI Governor Sanjay Malhotra

The Reserve Bank of India cut its benchmark interest rate for the third time in a row following the Monetary Policy Committee (MPC) meeting today, as it continues to adopt a more growth-friendly, accommodative approach. The MPC changed the monetary policy stance to “neutral” from “accommodative” as muted inflation provided space for policymakers to focus on supporting economic growth. The Monetary Policy Committee (MPC), which consists of three RBI officials and three external members, cut the repo rate to 5.50 per cent. It cut the cash reserve ratio (CRR) by 100 basis points to 3 per cent, adding to already surplus liquidity.

According to a Reuters poll conducted from May 19 to 28, 53 out of 61 economists expect the RBI to cut the repo rate by 25 basis points to 5.75 per cent, while two foresee a steeper 50 bps reduction. The remaining six predict no change. So far this year, the RBI has lowered rates by a total of 50 bps, 25 bps each in February and April and shifted to an ‘accommodative’ policy stance, citing weak inflation and slowing economic growth.

India’s economic momentum has weakened, with GDP growth projected at 6.3 per cent for FY25. Meanwhile, CPI inflation eased to a multi-year low of 3.34 per cent in March and is expected to stay below the RBI’s 4 per cent target. These conditions provide the Monetary Policy Committee with scope for another repo rate cut. Although domestic factors remain the primary driver of RBI policy, global trends are playing a growing role. Central banks worldwide are leaning towards rate cuts amid softening growth and heightened geopolitical risks, including persistent US-China trade tensions that are dampening global demand and affecting India’s export prospects.

5:33 PM

'Support growth now, while inflation gives us the room to act'

Dr Chandrika Raghavendra, Assistant Professor - Economics & International Business, Great Lakes Institute of Management, Chennai, said, "With a bold 50 bps cut, the RBI has shifted gears decisively, from cautious navigator to growth accelerator. This move isn’t just about lowering rates; it’s about reigniting economic momentum before headwinds strengthen. Think of it as the central bank adding fuel before the gradient steepens, preemptive, not reactive. The message is clear: support growth now, while inflation gives us the room to act."

4:32 PM

RBI’s big rate cut marks shift toward growth and flexibility: Forvis Mazars

"In a decisive policy pivot, the RBI governor announced a 50 basis point repo rate cut and a shift to a neutral stance, signaling flexibility amid evolving macroeconomic conditions. Even in the face of ongoing global uncertainty, these steps should be enough to maintain the Indian lending ecosystem’s lubrication," Akhil Puri, partner, financial advisory, Forvis Mazars.

4:25 PM

Policy decision a strong push to revive growth: Great Lakes Institute's Swapnil Sahoo

The RBI’s 50 bps rate cut is a strong push to revive growth. It lowers borrowing costs and boosts confidence, but long-term recovery will also need government support and reforms," Swapnil Sahoo, assistant professor, Great Lakes Institute of Management, Gurgaon.

1:00 PM

RBI MPC Meet Live: Final regulations on gold loans will be out by today or latest by Monday, says RBI governor

Don't need credit appraisal for gold loans up to ₹2.75 lakh, RBI governor.

12:39 PM

MPC updates: CRR cut will certainly increase flow of credit, says RBI governor

12:32 PM

Rate cut will have positive effect on growth; impact will be seen only in later half of FY26: RBI governor

As compared to past trend, rate transmission has been much faster, says RBI Governor Sanjay Malhotra.

12:26 PM

Wanted to provide certainty to markets, so we frontloaded repo rate cut by 50 bps: RBI Governor.

It can be assumed that RBI has won fight against inflation, says RBI Governor Sanjay Malhotra.

12:09 PM

No thought on targeted level of call rate, says RBI governor

"Liquidity is abundant. We have not given thought to any targeted level of call rate," RBI Governor Sanjay Malhotra said today.

12:08 PM

MPC LIVE update: MPC press briefing begins

11:54 AM

Policy rate easing add a second engine to the consumption growth: PwC India's Ranen Banerjee

“The MPC has delivered an unexpected outsized policy rate cut of 50bps against a consensus expectation of a 25bps cut. This is accompanied by a 100bps staggered cut in CRR and a change in policy stance to neutral. The decision is likely owing to the GDP prints for Q4 of FY25 reflecting weakness in manufacturing and consumption, as well as the adverse impacts of global trade and conflict headwinds. The policy rate easing, combined with the liquidity increase for banks when system liquidity is already comfortable, is likely to add a second engine to the consumption growth flight that is anticipated to be already in flight from the income tax cuts taking effect in FY26," said Ranen Banerjee, partner and leader, economic advisory, PwC India.

11:43 AM

MPC decision can boost demand in Indian real estate sector: Anuj Puri, chairman, ANAROCK Group

"As widely anticipated, the RBI decided to reduce the repo rates by 50 bps -- to 5.5 per cent -- to the backdrop of moderating inflation in the country. This is the third consecutive time this year that the central bank has cut the repo rates. This effectively lowers the cost of borrowing, making home loan EMIs easier on the pocket and thereby directly improving affordability for buyers. This can potentially boost demand in the Indian real estate sector, especially in affordable and mid-income segments," Anuj Puri, chairman, ANAROCK Group, said.

11:27 AM

Rationale for MPC decision

"Inflation has softened significantly over the last six months from above the tolerance band in October 2024 to well below the target with signs of a broad-based moderation. The near-term and medium-term outlook now gives us the confidence of not only a durable alignment of headline inflation with the target of 4 per cent, as exuded in the last meeting but also the belief that during the year, it is likely to undershoot the target at the margin," the RBI MPC said in its resolution notes.

11:05 AM

Global growth and trade projections have been revised downwards by multilateral agencies: MPC resolution

Market volatility has eased in the recent period with equity markets staging a recovery, dollar index and crude oil softening though gold prices remain high, the MPC stated in its resolution notes.

10:54 AM

RBI policy: MPC cuts repo rate by 50 bps to 5.5%, shifts stance to neutral

Retail inflation, measured by the Consumer Price Index (CPI), eased to 3.16 per cent in April 2025, down from 3.34 per cent in March, marking the lowest rate since July 2019. Read the detailed story on MPC announcements here.

10:38 AM