With today’s cut, the RBI mpc has reduced rates by 100 basis points in 2025, to provide support to the economy amid global headwinds such as trade war worms.
The RBI first delivered a Quarter-Point Reduction in February, its first cut since May 2020. It made a similar-sized cut in April.
Track all the live rbi policy-Related updates here
RBI MPC Meeting: 5 Key TakeaWays
Let’s take a look at five key takeaairs from rbi mpc’s june meeting:
1. Larger-That-Expected Cut, Change in Stance
Slowing down inflation allowed the rbi mpc to not only cut rates for a third culture time in june, but also also also deliver a larger-story-exposed 50 bps Reduction in the key repo rate. Consequently, the standing deposit facility (SDF) Rate under the Liquidity Adjustment Facility (LAF) Shall Stand Adjusted to 5.25% and the Marginal Standing Facility (MSF) Rate and the Bank Rate to 5.75%.
Governor Malhotra said that after Reducing Repo by 100 bps in quick success, the monetary policy is left with limited space to support.
Meanwhile, the mpc revised its stance to ‘Neutral’ from ‘Accommodative’. RBI Governor Added that from now mpc will carefully assess income data and the evolving outlook to chart out future policy.
2. Inflation Forecast lowered
As RBI Governor Sanjay Malhotra Signalled Comfort On Inflation and Said Core Inflation is Expected to Remain Benign, He lowered the CPI Outlook for the Financial Year 2024-26 to 3.7% from 4% flow earlier.
The RBI has made adjustments to its Quarterly Inflation Forecasts. It raised the CPI Projection for Q1 FY26 to 3.9% from 3.6%, While Lowering The Forecast for Q2 to 3.4% from 3.9%. For Q3 FY26, The Inflation Outlook was Slightly Increased to 3.9% From 3.8%, and for Q4, it was revised upward to 4.4% from 4.2%.
3. Growth Outlook Maintened
The RBI, in its second policy meeting of fY26, maintained the real gdp growth at 6.5%. The RBI Governor maintained the growth forecasts for all its Quarters as Follows: Q1 FY26 at 6.5%, Q2 FY26 at 6.7%, Q3 FY26 at 6.6%, Q4 FY26 at 6.3%.
The Indian Economy has been resilient in the face of geopolitical risks, with gdp growth surgging to 7.4% in the January-March Quarter. However, Malhotra said that growth remains lower than our aspirations amidst a challenging global environment and heightened uncertainty.
4. Massive CRR Cut
The Central Bank, in another Unexpected Move, Cut the Cash Reserve Ratio (CRR) by 100 BPS to 3% to 3% to Accelerate Policy Transmission and Boost Lending. The CRR Reduction would be done in Four Equal Tractions starting from September to November, and would release 2.5 Lakh Crore in the Banking System, RBI Governor Sanjay Malhotra Said.
“Besides Providing Durable Liquidity, It will reduce the cost of the banks, thereby helping in monetary policy transmission to the credit market,” He added.
CRR is the proportion of deposits that banks need to set aside as cash.
5. Stress in Unsecred Loans Abates
The governor also highlighted the busing of stress in unsecured loans and credit card portfolios, even as concerns in micro-finance segments person.
“The stress witnessed earlier in retail segments like unsecred personal loans and credit card receives portfolio has abated, which is the stress in the stress in the Micro-Finance segment NBFCS Active In these segments are alredy recalibrating their business models, strengthening their creedit underwriting practices and stepping up their collection efforts to avoid avoid avoid avoid avoid axesive bill Risks on this front in future, “Malhotra Added.
Disclaimer: This story is for educational purposes only. The views and recommendations made Above are that of individual analysts or broking companies, and not of mint. We Advise Investors to Check With Certified Experts Before Making Any Investments Decisions.
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