RBI cuts repo rate by 50 bps to 5.5%, June 6 policy meet update

General
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RBI Governor Sanjay Malhotra, in today’s MPC meet, confirmed a 50 basis point cut in the repo rate to 5.5%. The stance has shifted from accommodative to neutral.

That makes it three straight cuts this year, and this one is being called a front-loaded move to push growth.

Watch it live here:

Here’s a quick summary from RBI’s June MPC meet:

  • Repo rate cut to 5.5%.
  • Policy stance changed to neutral.
  • Cash Reserve Ratio (CRR) cut by 100 basis points, to be implemented in 4 stages. Expected to release ₹2.5 lakh crore of primary liquidity
  • Consumer Price Index (CPI) inflation forecast for FY26 revised down to 3.7% (earlier 4%).
  • GDP growth estimate kept unchanged at 6.5% for FY26.
  • CPI inflation for April came in at 3.2%, the lowest in nearly 6 years.
  • Food prices eased, core inflation remained steady, and crude oil softened.

The next MPC meeting is scheduled for August 4-6, 2025. Here’s the circular from RBI’s June 2025 MPC meet: RBI Circular

You can read the full statement by the RBI Governor Sanjay Malhotra here

Too soon for such a big cut? What’s your take? :slight_smile:

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It wasn’t unexpected, but the rate cut is here. IMO, more liquidity in the market ahead - expected upward turn in markets, inflation likely to go up slightly in the medium to long term, bank’s interest income to take hit as loan interest rates go down, debt funds with higher rate instruments likely to give higher returns due to increased market value of underlying assets.

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