RBI Set to Deliver Third Consecutive Repo Rate Cut Amid Growth Concerns
- RBI’s Monetary Policy Committee meeting began on June 5, with a decision due on June 6.
- A third consecutive 25 bps repo rate cut to 5.75% is widely expected.
- The move is driven by low inflation and slowing GDP growth amid global uncertainties.
The Reserve Bank of India’s Monetary Policy Committee (MPC) commenced its three-day meeting to deliberate on the third consecutive cut in the repo rate. Economists and market experts widely expect the Central Bank to lower the repo rate by 25 basis points, bringing it down to 5.75 percent.
Chaired by RBI Governor Sanjay Malhotra, the committee’s decision is scheduled to be announced on June 6. The RBI has already reduced the benchmark lending rate by a cumulative 50 basis points in the last two policy reviews, easing it to 6 percent.
This anticipated rate cut comes amid growing concerns over slowing economic growth and stable inflation levels. Headline CPI inflation remains well below the RBI’s medium-term target of 4 percent, giving the central bank room to maneuver. Meanwhile, GDP growth has shown signs of weakening, impacted by external factors such as trade disruptions resulting from recent U.S. policy changes.
Market watchers are closely monitoring the policy outcome, anticipating further monetary support to stimulate demand and investment. While the RBI retained its FY26 GDP growth projection at 6.5 percent in April, several global institutions and rating agencies have revised their forecasts downward to between 6.0 and 6.3 percent, citing mounting global headwinds.
