Country The common people may soon get a great news. The Reserve Bank of India (RBI) may cut interest rates by 0.25 percent for the third consecutive time on Friday this week, due to the inflation below the average target of 4 percent. This will boost growth amid global uncertainty arising from increasing US import duty. The Monetary Policy Committee (MPC) of the Reserve Bank will start a meeting on the next bivarted monetary policy on 4 June and the decisions will be announced on 6 June (Friday). The RBI cut the major interest rate (repo) by 0.25–0.25 percent in February and April this year, decreasing from 6.50 percent to 6 percent.
The 6 -member MPC headed by RBI Governor Sanjay Malhotra also decided to replace the stance ‘generous’ with ‘neutral’ in his April policy. In response to a reduction of 0.50 percent of the policy repo rate from February 2025, most banks have reduced the marginal cost (MCLR) of their repo-linked external benchmark based lending rates (EBLR) and fund-based lending rates.
What is experts of experts
Madan Sabnavis, Chief Economist of Bank of Baroda, said, “We believe that inflation is under control and due to the RBI’s various measures being very comfortable, the MPC will cut the repo rate by 0.25 percent on June 6. The increase and inflation will be significant because both the criteria are expected to be amended.” He also hoped that the RBI would make a detailed analysis about how the global environment will affect the Indian economy, given that the relief from the tariff by the US would end in July.
How far RBI can cut repo rate
Aditi Nair, the chief economist at the rating agency Ecra, said that the CPI (Consumer Price Index) for a large part of the current financial year is expected to continue monetary relaxation by MPC, with an estimate of up to 4 percent of inflation. He said, “This week is expected to cut a rate of 0.25 percent, followed by two more policy reviews, which will increase the repo rate to 5.25 percent by the end of the cycle.”
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