RBI Meeting Begins Today, Repo Rate May Be Cut by 0.25%
New Delhi: The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has started its meeting from Wednesday to review interest rates. Economists and industry experts believe that the central bank may cut the repo rate by 25 basis points or 0.25%.
RBI Governor Sanjay Malhotra will announce the MPC’s decisions on June 6. In the previous two MPC meetings, the central bank had already reduced the repo rate by 50 basis points, bringing it down to 6%. Given the favorable economic conditions for an interest rate cut, market analysts expect another 25 basis points reduction this time, which would lower the repo rate to 5.75% from the current 6%.
The headline inflation rate remains consistently below RBI’s medium-term target of 4%, while recent global shocks—such as U.S. policy changes—have led to a slowdown in GDP growth. Several rating agencies and global institutions have revised India’s GDP growth forecast for FY26 downward. While RBI maintained its growth projection at 6.5% in April, other agencies have revised their forecasts to a range between 6.0% and 6.3%.
According to Bajaj Broking Research, “The MPC has clearly shifted its stance from neutral to accommodative, reflecting RBI’s intention to enhance liquidity and support growth. The situation has further strengthened with retail inflation falling to 3.2% in April, the lowest level since July 2019.”
A recent report by SBI noted that to balance the uncertain economic environment, the RBI may cut the repo rate by up to 50 basis points in the June MPC meeting. The report stated, “We estimate that the RBI may cut the repo rate by 50 basis points to support economic growth.” Meanwhile, a report by Bank of Baroda suggests a 25 basis points cut in the upcoming MPC meeting.
