The Reserve Bank of India (RBI) is expected to announce its third consecutive 25 basis points (bps) reduction in the repo rate on June 6, 2025. This anticipated move is in response to persistent low consumer price inflation, which remains below the RBI’s medium-term target of 4%, and growing global economic uncertainty, particularly due to U.S. tariff measures. Experts believe that a rate cut would provide essential support to domestic economic growth during this period of external volatility. The move is seen as a proactive measure to sustain momentum amid evolving international and inflationary conditions.
According to a report by CareEdge Ratings, the RBI’s Monetary Policy Committee (MPC) is expected to focus on supporting the country’s ongoing economic recovery and growth momentum. The MPC is likely to consider measures aimed at enhancing growth, with expectations pointing toward a possible 25 basis points reduction in the repo rate. This move would be in support of stimulating domestic demand and sustaining the positive trajectory of economic activity. The emphasis on growth reflects a continued accommodative policy stance amid evolving economic conditions.
