In this screenshot from @reservebankofindia593 via Youtube, RBI Governor Sanjay Malhotra gestures while delivering the Monetary Policy statement, in Mumbai, on June 6, 2025. Photo: @RBI via PTI Photo)
Reserve Bank of India’s monetary policy committee (MPC) on Friday (June 6, 2025) decided to cut policy repo rate by 50 basis points to 5.5% with immediate effect.
Following the rate cut, the key policy rate eased to a three-year low of 5.5%t, providing relief to home, auto and corporate loans borrowers.
This is the lowest repo rate in three years.
Reserve Bank of India Governor Sanjay Malhotra said “Indian economy presents strength, stability and opportunity amid global concerns.”
Mr. Malhotra said “RBI reduces cash reserve ratio by 100 bps, will release ₹2.5 lakh crore of bank funds.”
Mr. Malhotra said that “Indian economy growing at a very fast pace, we are making all efforts to grow even faster in our vision of Viksit Bharat” and added that “Indian economy offers immense opportunities to investors.”
The RBI Governor said “Inflation outlook for FY26 revised downwards to 3.7%, from 4%.”
Mr. Malhotra further added that “After reducing repo by 100 bps in quick succession, monetary policy left with limited space to support growth.”
He said “Government’s continued thrust on capex should help revive investment activity.”
The RBI Governor said from now MPC will carefully assess income data, evolving outlook to chart out future policy. He also added that “RBI retains GDP growth forecast for current fiscal at 6.5 pc, geopolitical tensions and weather vagaries pose headwinds.”
Mr. Malhotra said “Current account deficit (CAD) for FY’25 to remain low; FY26 within sustainable level.”
He said “Core inflation remains largely stable, benign prices expected for major items going forward.”
The Reserve Bank of India Governor said “Core inflation largely remains stable, contained; need to be watchful of weather- related uncertainties, tariff concerns.”
Mr. Malhotra also said “India continues to remain attractive destination despite moderation in net FDI. Forex reserves at $691.5 billion, sufficient to fund more than 11 months of import needs, external sector remains resilient.”
The Reserve Bank of India Governor said “MPC felt frontloading of rate cut will boost growth. ‘Comfortable’ surplus liquidity situation has reinforced faster rate transmission.”
The Reserve Bank of India Governor reiterated that “Indian economy progressing well, broadly on expected lines despite global uncertainties. RBI would continue to monitor evolving liquidity situation and financial market condition and take proactive measures.”
(With PTI inputs)
Published – June 06, 2025 10:28 am IST
