Repo Rate Decision Expected on June 6
The Reserve Bank of India’s Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, will announce its policy decision on Thursday, June 6 at 10 AM.
Most economists expect a 25 basis point (bps) cut in the repo rate, which would be the third consecutive reduction in the post-COVID era. Some experts even expect a larger 50 bps cut, citing easing inflation and global rate-cutting trends.
Total Rate Cuts Expected in FY25
According to a Zee Business poll:
- Four out of five economists expect a total rate cut of 75–100 basis points in FY2025.
- This includes the 25 bps cut already made in April 2025.
- The rest expect at least 50 bps in cuts over the full fiscal year.
No Change Expected in Policy Stance
In April, the RBI shifted its policy stance from ‘neutral’ to ‘accommodative’.
The accommodative stance is expected to continue, giving RBI flexibility to reduce rates if needed to support growth.
GDP Growth and Inflation Forecasts Likely to be Revised
Economists believe RBI may update its macro forecasts:
- GDP growth may be revised upwards, after the 7.4% growth in Q4 FY25, which beat expectations.
- Inflation estimates may be revised lower due to:
- Softer crude oil prices
- Above-normal monsoon forecast
Key Factors to Watch in the June Policy
Economists and markets will keep a close eye on:
- The July 9 U.S. tariff deadline
- Global geopolitical tensions
- Domestic liquidity and credit conditions
- Performance of commercial banks
- Progress of the monsoon season
Why This Policy Review Matters
This review comes at a time when central banks across the world are easing interest rates to support growth amid cooling inflation and economic uncertainty. India’s strong GDP numbers give RBI room to support growth further while remaining cautious.
Conclusion
All eyes are on the RBI’s June 6 policy decision. A 25 bps repo rate cut is widely expected, which could:
- Bring down EMIs for borrowers
- Support economic momentum
- Signal continued monetary easing through FY25
If confirmed, this will mark the third consecutive repo rate cut, showing RBI’s clear intent to support growth while keeping inflation in check.
