RBI MPC meeting updates: CRR cut to aid transmission, improve credit growth; IndusInd bank issue should settle down very soon, says Malhotra

CS Setty, Chairman at SBI and IBA:

“A 50-bps policy rate cut, a staggered 100 bps CRR cut and change of stance to neutral, RBI today's monetary policy communication was action packed - innovative, out of the box and an unanticipated surprise. The MPC has broadly addressed any concerns on slowdown in growth on account of global uncertainties and fully capitalized on the softening domestic inflation to deliver a frontloaded rate cut, staggered durable liquidity injection yet conserving the space for future action.

The policy is definitely positive for all sectors of the economy, particularly for banking and finance. In particular lower cost of borrowing will act as a counterbalance to any uncertainty.”

SIAM President on RBI Repo Rate Cut:

Responding to the rate cut by 50 basis points to 5.5% from 6% by RBI, Shailesh Chandra, President, SIAM and Managing Director of Tata Passenger Vehicles Ltd & Tata Passenger Electric Mobility Ltd. said, “Such reduction in repo rates would have a positive impact on the Auto sector since it would lead to increased accessibility to finance at reduced costs, thereby creating a positive sentiment amongst the consumers in the market.”

Venkatram Mamillapalle, country CEO & managing director, Renault India:

The Reserve Bank of India’s decision to reduce the repo rate by 50 basis points to 5.5%, marking a cumulative 100 bps cut in recent months (25bps cut in Feb 2025, followed by 25bps in April 2025 and 50 bps in June ), is a welcome and timely move.

Combined with a significant 100 bps reduction in the Cash Reserve Ratio (CRR), which releases ₹2.5 lakh crore into the banking system, this policy is expected to strengthen liquidity and accelerate the transmission of lower interest rates to consumers, which will spur demand in the economy. For the automotive sector, this translates directly into improved access to affordable vehicle financing, especially in the entry and mid-level segments.

The reduction in CPI inflation forecast to 3.7% for FY26 will likely increase real disposable income, supporting consumer sentiment. With private consumption already on a healthy trajectory and the festive season on the horizon, we expect this policy environment to drive demand further. Moreover, robust gross FDI despite global headwinds reaffirms India’s attractiveness as a long-term investment destination.

The RBI’s proactive measures are poised to spur automotive retail, enhance customer affordability, and strengthen the economic cycle. We are optimistic that FY2025-26 will see an upward growth trajectory for the auto industry, powered by favorable macroeconomic indicators, strong fundamentals, and evolving consumer confidence," said Mr. Venkatram Mamillapalle, Country CEO & Managing Director, Renault India

RBI Governor Sanjay Malhotra on June 4 said the Monetary Policy Committee’s (MPC) decision to cut cash reserve ratio (CRR) by 100 basis points (bps) may suffice for now, but it should not be seen as a longer term move. Read more

RBI Governor Sanjay Malhotra on June 6 announced the outcome of the central bank's Monetary Policy Committee's (MPC) meeting. RBI has reduced its policy repo rate by 50 basis points to 5.5 percent, and has changed its stance to 'neutral' from 'accommodative'. RBI also cut the cash reserve ratio (CRR), which banks are required to hold, by 100 basis points to 3% with an aim to accelerate policy transmission and boost lending. Read more

The RBI Governor’s larger-than-expected rate cut of 50 bps along with a 100 bps cut in the Cash Reserve Ratio for banks - seen as a step to boost domestic demand – has triggered a sharp rally in rate-sensitive shares, taking key indices higher. Read more

The Reserve Bank of India's (RBI) move to cut its benchmark repo rate by 50 basis points (bps) to 5.50 percent may finally provide an incentive for more buyers of entry-level homes to definitively enter the housing market in the affordable category, which has been sluggish for the past two years but have shown green shoots in recent months due to above-normal price increases for higher-category residences. Read more

In a clear signal to the government, the Reserve Bank of India (RBI) on June 6 said it has front-loaded its monetary support to the economy and now expects other levers, especially fiscal policy, to drive growth. The central bank cut the benchmark repo rate by 50 basis points to 5.5 percent and shifted its policy stance from “accommodative” to “neutral”. Read more

IndusInd Bank Ltd's shares rose over 4% on June 6 post-RBI officials' comments on the lender's recent troubles, including accounting lapses.

"IndusInd Bank has taken enough steps to improve accounting practices. The bank is doing well on the whole," said Reserve Bank of India Governor Sanjay Malhotra at the post-monetary policy press conference in Mumbai. Read more

Gold finance stocks were buzzing in trade on June 6 after RBI Governor Sanjay Malhotra stated that the loan-to-value for gold loans below Rs 2.5 lakh is set to be revised to 85 percent from 75 percent,  giving NBFCs greater lending flexibility. This led to sharp buying in gold financiers like Muthoot Finance, Manappuram Finance, and IIFL Finance, with their stocks rising between 2 to 7 percent. Read more

The Reserve Bank of India's (RBI) 50 basis-point repo rate cut to 5.5 percent on June 6, has significant implications for depositors. With this third consecutive rate reduction since February 2025, banks are expected to lower their fixed deposit (FD) interest rates, impacting risk-averse investors and senior citizens who rely on stable returns. Read more

The RBI’s Monetary Policy Committee (MPC) surprised the street with a front-loaded 50 basis points repo rate cut to support economic growth, while changing the policy stance from ‘accommodative’ to ‘neutral’ on June 6, along with a cut in the cash reserve ratio (CRR). Five of the six RBI MPC members voted for the 50 bps cut, which was above analysts’ expectations.

Moneycontrol has collated a list of top 14 rate sensitive stocks from experts with short term perspective. The stock price of June 5 is considered for the calculation of returns. Read more

Realty shares rallied sharply on Friday, with the Nifty Realty index topping sectoral charts after the Reserve Bank of India (RBI) delivered a larger-than-expected interest rate cut of 50 basis points and also lowered the cash reserve ratio to infuse additional liquidity into the banking system. Read more

Mayank Jain, CEO, KREEVA - "The RBI’s bold move to cut the repo rate by 50 basis points to 5.5% and the CRR by 100 basis points to 3% is a booster for the real estate sector. The reduced borrowing cost will not only strengthen homebuyers' sentiments but also help in easing the liquidity flow in the market. In light of significant market volatility and real estate witnessing a surge in the investment flow, this proactive approach signals the central bank's strong commitment to thrust economic momentum and boost investor confidence."

Sahil Agarwal, CEO, Nimbus Realty says "The RBI’s 50 bps repo rate cut marks a cumulative reduction of 1% in just six months and will catalyse the real estate sector's growth. Combined with the phased 100 bps CRR cut, will infuse liquidity into the banking system, lowering borrowing costs and expanding credit availability for homebuyers. For instance, on a Rs. 1 crore home loan (20-year tenure), borrowers can now save up to Rs. 6,000 per month. Moreover, it also underscores RBI’s faith in India’s economic resilience, easing inflation concerns and fostering long-term growth optimism."

RBI Governor Sanjay Malhotra (press conference): Rise in COVID cases not a concern for now. There was no major supply chain or economic activity disruption due to the India-Pak war, and whatever little impact it had has been normalised now.

RBI governor Sanjay Malhotra express concerns about crypto, saying it can hamper financial stability and monetary policy.

RBI DG Swaminathan Janakiraman: Each of the crisis in banking sector gives us some lessons, this helps us sharpen our supervisory tools. Going forward, we will look for this kind [IndusInd] of red flags, so that they are in a position to anticipate crisis in terms of succession planning, he said.

RBI MPC meeting live: IndusInd Bank has taken enough steps to improve accounting practices, says RBI governor Sanjay Malhotra. The bank issue should settle down very soon. No systemic impact arising out of the issue, says Malhotra. Will keep monitoring the banking system.

RBI governor Sanjay Malhotra: Monetary policy is a necessary but not a sufficient instrument. Demand also has to be there so it will also depend on other market conditions. Market forces will certainly be able to push for better prices.

RBI governor Sanjay Malhotra: There was nothing new in the draft norms on gold loans. We have consolidated all other norms. We have seen some regulated entities were not following the norms because there was no clarity hence we have consolidated it. We will today or by Monday morning release the final guidelines.

RBI Governor Sanjay Malhotra (press conference): Confident that CRR & repo rate cut will increase flow of credit; not able to quantify the extent. Liquidity is sufficient, we have not given it any thought to any targeted level of call rate

RBI Governor Sanjay Malhotra (press conference): While 3% appears to be a comfortable reserve ratio for now, it's important to note that this may change in the future. Please don't hold me to this exact figure, we're not committing to maintaining this level indefinitely, but at present, it seems sufficient.

RBI Governor Sanjay Malhotra (press conference): There was no voting per se on the stance but the views of all MPC members were taken into account.

If there are opportunities to build reserves, we will do it, said RBI governor Sanjay Malhotra on June 6.

"The message is clear that Inflation is under control and we have won the fight with higher inflation. Growth is at good level, but there is more room for growth. We could have done the CRR cut after 4 months as well, but we frontloaded it to boost sentiments," he said.

RBI Governor Sanjay Malhotra: Liquidity in the system is currently abundant. If we conduct any VRRR operations, the rate will remain at 5.0%. However, if we opt for VSRR (Variable Rate Standing Reverse Repo) or other modes, we have the flexibility to adjust the rate accordingly. At this point, we haven’t made a decision and it will depend on how the liquidity situation evolves, and we’ll take a call as needed.

Our policy is clear and consistent, we do not manage any band, target on currency exchange rate. We let the market to determine prices, said RBI governor.

The monetary policy committee now has a limited scope to boost growth, which is why the stance was changed to neutral, said  RBI governor Sanjay Malhotra.

Madhavi Arora, Chief Economist, Emkay Global: The RBI appears to have front-loaded all policy actions, be it higher-than-expected rate cuts or infusing durable albeit staggered liquidity via lower CRRs. All of that now implies that the ball is in the banks’ court to transmit easier financial conditions faster.

The benchmark equity indices staged a sharp rebound on Friday, with the Sensex surging over 1,000 points from its intraday low and the Nifty trading above the 24,900 mark, after the Reserve Bank of India (RBI) delivered a higher-than-expected 50 basis points repo rate cut and announced liquidity-boosting measures.

Here are the key drivers behind Friday’s market rally:

Anuj Puri, Chairman – ANAROCK Group:

The reduction in the Cash Reserve Ratio (CRR) will help boost liquidity in the banking system, which means that banks have more funds to lend. Developers will be able to access more capital for their projects, and this can positively impact project completion timelines. It also gives banks the option to reduce home loan interest rates, which will have again positively impact sentiment in the affordable and mid-income segments.

Nevertheless, these positive impacts may be partially dampened by the ongoing global trade tensions and tariffs imposed by the Trump administration, which have increased the cost of imported construction materials and created economic uncertainty. We may see some impact on the demand for luxury and commercial projects, and developer margins may be squeezed.

While the rate cut is a strong positive for real estate, especially for affordable housing, much now depends on how well it can adapt to higher input costs and ongoing global uncertainties. Continued policy support and a shift to domestic sourcing could be critical for sustained growth.

Anuj Puri, Chairman – ANAROCK Group:

As widely anticipated, the RBI decided to reduce the repo rates by 50 bps (to 5.5%) to the backdrop of moderating inflation in the country. This is the third consecutive time this year that the apex bank has cut the repo rates. This effectively lowers the cost of borrowing, making home loan EMIs easier on the pocket and thereby directly improving affordability for buyers. This can potentially boost demand in the Indian real estate sector, especially in affordable and mid-income segments. Affordable housing faced the sharpest pandemic fallout, with sales and new launches shrinking in the top 7 cities.

ANAROCK data shows that affordable housing sales share plummeted from 38% in 2019 to 18% in 2024, while its supply share dropped from 40% to 16% in the same period. However, a 19% dip in unsold stock hints at sustained demand led by end-users. It will also lower developers’ borrowing costs. It is sincerely hoped that banks pass on the benefits of this move seamlessly to borrowers.

The shares of Bajaj Finance, SBI Cards and others non-banking financial services (NBFC) strongly surged on June 6 after Reserve Bank of India (RBI) Governor Sanjay Malhotra announced the outcome of MPC's meeting, which included a bumper 50 bps key rate cut and 100 bps reduction in Cash Reserve Ratio (CRR). Read more

RBI governor Sanjay Malhotra: Inflation has softened significantly over the last six months from above the tolerance band in October 2024 to well below the target with signs of a broad-based moderation. The near-term and medium-term outlook now gives us the confidence of not only a durable alignment of headline inflation with the target of 4 per cent, as exuded in the last meeting but also the belief that during the year, it is likely to undershoot the target at the margin. While food inflation outlook remains soft, core inflation is expected to remain benign with easing of international commodity prices in line with the anticipated global growth slowdown. The inflation outlook for the year is being revised downwards from the earlier forecast of 4.0 per cent to 3.7 per cent. Growth, on the other hand, remains lower than our aspirations amidst challenging global environment and heightened uncertainty.

Thus, it is imperative to continue to stimulate domestic private consumption and investment through policy levers to step up the growth momentum. This changed growth-inflation dynamics calls for not only continuing with the policy easing but also frontloading the rate cuts to support growth. Accordingly, the MPC voted to reduce the policy repo rate by 50 bps to 5.50 per cent. Dr. Nagesh Kumar, Prof. Ram Singh, Dr. Rajiv Ranjan, Dr. Poonam Gupta and Shri Sanjay Malhotra, voted to decrease the policy repo rate by 50 bps. Shri Saugata Bhattacharya voted for a 25 bps cut in repo rate.

Pradeep Aggarwal, founder & chairman, Signature Global (India): 

The twin reduction of the repo rate by 50 basis points to 5.50% and cash reserve ratio by 100 basis points to 3% respectively by the RBI provides significant relief for homebuyers across the country. This bold move by the apex bank comes at a crucial time when inflation is easing, and the economy requires strong stimulus to sustain growth. Lower borrowing costs will make home loans more affordable, thereby encouraging more buyers to enter the market. The reduction in CRR is expected to infuse significant liquidity in the banking system, which will prompt banks to lend even more.

The demand for mid and premium segment homes has already been on the rise following previous rate cuts, and this larger reduction will further accelerate interest from both homebuyers and investors. Additionally, the positive market sentiment around the possibility of further rate cuts this financial year bodes well for the real estate sector, paving the way for sustained growth and renewed confidence in the housing market.

The Reserve Bank of India’s decision to reduce the repo rate by 50 basis points to 5.5% underscores a clear commitment to supporting growth, said Yashish Dahiya, Chairman & Group CEO of PB Fintech.

“Coupled with the shift to a neutral stance, it signals a more balanced and measured approach going forward. This move will ease borrowing costs and enhance liquidity, benefiting MSMEs and retail loan borrowers. Overall, we believe this step will positively influence India’s economic momentum amid global headwinds.”

Vimal Nadar, National Director & Head, Research, Colliers India

The RBI has reduced the repo rate further by a strong 50 bps - bringing it down to 5.5%, the lowest in almost three years. The third consecutive reduction in benchmark lending rate coupled with shifting to neutral stance reaffirms the growth-supportive monetary policy aided by softening of inflation levels. Despite external volatilities and evolving trade scenarios, the Central Bank projects the domestic economy to grow at 6.5% in Fiscal 2025-26. For the real estate sector, this move is a strong tailwind: it lowers borrowing costs for buyers & developers, boosts homebuyer confidence, and enhances affordability, especially in the affordable and mid-income housing segments. This could lead to improved buyer sentiment, an increase in residential property enquiries and conversions, and a pickup in sales volumes across key urban markets. Over the medium term, the reduction in the cost of capital is also expected to enhance investor confidence, potentially boosting activity in both residential and commercial real estate segments

Umeshkumar Mehta, CIO, SAMCO Mutual Fund:

A third straight cut in the repo rates this year with 50 bps cut instead of an estimate of 25 bps is a pleasant move. This demonstrates a pro-growth stance and a front-loading of rate cuts given our stable economic growth and declining inflation. A change in policy stance from accommodative to neutral is also justified as it can help to strike a right balance between growth and inflation, especially if geopolitical issues escalate further. Today’s policy levers are expected to boost consumption, stimulate domestic growth, and ensure liquidity amongst the varied global challenges

The Reserve Bank of India (RBI) cut its policy rate by 50 basis points (bps) on June 6, its third reduction since February 7, 2025, paving the way for lower home loan interest rates. The RBI's repo rate cut will directly benefit home loan borrowers, especially existing ones, by reducing their interest burden.

Check how will the repo rate cut benefit borrowers. 

RBI governor: The stress witnessed earlier in retail segments like unsecured personal loans and credit card receivables portfolio has abated, while the stress in micro-finance segment is persisting. Banks and NBFCs active in these segments are already recalibrating their business models, strengthening their credit underwriting practices and stepping up their collection efforts to avoid any excessive build-up of risks on this front in future.

Vishal Goenka, Co-Founder of IndiaBonds.com:

“A hawkish Deep rate cut by RBI : Front loading of rate cuts by RBI addresses the need to spur growth as short end rates come down aggressively which in turn will assist corporate borrowing through capital markets for the short end. The growth expectations remained at 6.5% for FY26 and inflation expectations lowered to 3.7%.

However we see a large curve steepening as long end rates remain relatively unchanged with RBI stance changing to neutral from accommodative. This implies that further room to cut rates remain limited and data dependent.

A balanced policy encouraging growth. Fixed deposit rates to come down sharply as banks transmit this rate cut. Investors should look at 2-3y corporate bonds for their portfolio as they continue to offer good spreads over government and FD rates and interest rates will come down more gradually for corporate bonds.”

Pallav Bagaria, Director at Sapient Finserv:

“Even rain gods can’t stop smiling and neither can the markets. A bold 50 bps rate cut signals the RBI’s unwavering commitment to growth. With good macros backing it, RBI has actually shown the world that this isn’t just a policy — this is 'Policy making – A Make in India initiative'. I think the cage is open for the ‘emerging market’ bird to fly.”

VK Vijayakumar, Chief Investment Strategist, Geojit Investments:

The higher-than-expected 50bp rate cut decision by the MPC, though positive for growth is slightly negative from the market perspective for the near-term. This big rate cut is, as the RBI Governor remarked, front-loading of the rate cut. The change in monetary stance from accommodative to neutral also indicates that more rate cuts are unlikely unless the situation warrants.

This big rate cut will impact the margins of the banks and, therefore, bank stocks will be under pressure in the near-term. However, the credit growth that this rate cut will hopefully stimulate will compensate for the dip in margins.

The stock markets rebounded strongly after initial hiccups. The BSE Sensex was trading at 81,997.35 points, up 555.31 points or 0.68%. The Nifty crossed the 24,900 mark and was trading at 0.72 percent higher at 24,930.25.

Sanjay Malhotra: The uncertainty around the global economic outlook has ebbed somewhat since the MPC met in April in the wake of temporary tariff reprieve and optimism around trade negotiations. However, it continues to remain elevated to weaken sentiments and lower global growth prospects. Accordingly, global growth and trade projections have been revised downwards by multilateral agencies. Market volatility has eased in the recent period with equity markets staging a recovery, dollar index and crude oil softening though gold prices remain high.

According to the provisional estimates released by the National Statistical Office (NSO) on May 30, 2025, real GDP growth in Q4:2024-25 stood at 7.4 per cent as against 6.4 per cent in Q3. On the supply side, real gross value added (GVA) rose by 6.8 per cent in Q4:2024-25. For 2024-25, real GDP growth was placed at 6.5 per cent, while real GVA recorded a growth of 6.4 per cent.

The Reserve Bank of India's monetary policy committee on June 6 announced a surprise 50 bps rate cut in its bi-monthly review. The 6-member rate-setting panel decided the outcome with a majority of 5-1, with Nagesh Kumar, Ram Singh, Rajiv Ranjan, Poonam Gupta and Sanjay Malhotra voting in favour of 50 bps cut. Saugata Bhattacharya voted for a 25 bps cut in repo rate.

RBI MPC meeting live: Repo rate now at 5.5

At 10.10am, the Bank Nifty and Nifty Private Bank indices were up, while Nifty PSU Bank jumped one percent, leading the banking packs. The Nifty Realty index soared two percent in trade, and the Nifty Auto index was 0.3 percent higher. The Nifty Financial Services index also rallied around one percent.

In a significant move on June 6, the Reserve Bank of India (RBI) announced a 100 basis point cut in the Cash Reserve Ratio (CRR), from 4 percent to 3 percent, to be implemented in four tranches of 25 bps each. The step is expected to inject Rs 2.5 lakh crore into the banking system, boosting liquidity and supporting credit flow. Read more

Ramani Sastri, Chairman & MD, Sterling Developers:

As affordable financing remains a key driver of demand in real estate, we welcome the RBI's decision to cut the repo rate by 50 bps, thereby encouraging end-users to make purchase decisions. However, it is important is that the benefits are passed on to borrowers immediately. While homebuyers will be able to secure home loans at lower rates, developers will benefit from low borrowing costs, thereby easing financing pressures. Overall, a rate cut would strengthen market confidence, infuse much-needed liquidity, and also act as a strong signal of policy support for the real estate sector and the broader economy, thereby encouraging investments. With sustained demand and softening home loan interest rates, the sector’s growth momentum will definitely accelerate further with continued policy support, firmly establishing the real estate sector as a key driver of the nation's economic development.

Chintan Panchmatya, Founder, Switch My Loan:

"The 50 bps rate cut has certainly come as a surprise, given the global macroeconomic cues and the domestic political landscape post-elections. This bold step by the RBI offers some immediate relief to consumers. We foresee a potential surge in demand for big-ticket purchases—cars, personal gadgets, and homes—driven by lower EMIs. The Consumer Durable, Auto, Personal Loan, and Home Loan categories are poised for strong growth this quarter. We also anticipate increased activity in loan balance transfers as borrowers seek to capitalize on lower interest rates."

Sonam Srivastava, Founder and Fund Manager at Wright Research PMS:

The RBI’s surprise 50 basis point rate cut underscores its strong pivot toward supporting growth, at a time when inflation is under control and global central banks are entering easing cycles. With real rates still elevated and domestic demand uneven, this move is aimed at unlocking credit growth, reviving private investment, and easing the burden on borrowers. Sectors like housing, autos, banking, and infrastructure are likely to see improved momentum as transmission picks up. It’s also a positive signal for rural and small business credit, where growth has been lagging.

That said, the market’s muted reaction reflects a mix of caution and global crosswinds. Concerns around rupee weakness, global risk appetite, and the effectiveness of transmission may be holding back investor enthusiasm. Nonetheless, the move improves the medium-term outlook for consumption and capex. Bond markets are expected to rally, especially in the long-duration segment, and we believe this cut sets the stage for a more accommodative environment heading into the second half of the year.

Anil Rego, founder & fund manager at Right Horizons PMS:

The Reserve Bank of India’s Monetary Policy Committee (MPC) delivered a front-loaded 50 basis point repo rate cut, bringing it down to 5.5%, while shifting its policy stance from accommodative to neutral. This marks a key turning point in India’s monetary approach, signaling a move from active easing to a more balanced, data-dependent stance amid rising global uncertainties and volatile capital flows.

Global economic growth is expected to slow by 50 basis points in 2025, with trade volume growth falling to 1.7% due to persistent geopolitical tensions. Domestically, liquidity remains in surplus, and rate transmission is gaining momentum, with banks lowering savings rates to 2.70% and fixed deposit rates by 30–70 basis points since February.

The RBI maintained its real GDP growth projections for FY26, expecting 6.5% in Q1, 6.7% in Q2, 6.6% in Q3, and 6.3% in Q4, reflecting confidence in sustained growth despite global headwinds. Inflation is expected to remain within the target band, supported by strong corporate and banking balance sheets and macro fundamentals. The cumulative 100 basis point rate cut since February underscores the RBI’s urgency to support demand, while the shift to a neutral stance signals a more cautious, data-driven approach to balancing growth and inflation risks going forward.

Indian benchmark indices Sensex and Nifty reversed early losses and moved higher on June 6 after the Reserve Bank of India (RBI) surprised markets with a larger-than-expected 50 basis points rate cut in its June policy meeting. The move sparked broad-based buying across sectors, while India VIX eased by another 3 percent, reflecting improved investor confidence. Read more

RBI governor Sanjay Malhotra said there is no tussle between price stability and growth in the medium and long-term.

RBI governor Sanjay Malhotra: Stress witnessed earlier in unsecured loans and credit cards has abated. Stress in MFI persists. On inflation and growth fronts Indian economy is progressing well, he said.

RBI governor Sanjay Malhotra: CRR cut be done in four equal tranches during the year. Will release primary liquidity of Rs 2.5 lakh crore in the banking system. CRR cut in four tranches 25 bps each starting from September 6, October 4, November 1 and November 29 this year

In a major boost to banks, the central bank announced a reduction of cash reserve ration by 100 bps.

RBI governor Sanjay Malhotra on June 6 said the central bank has injected Rs 9.5 lakh crore durable liquidity since January this year

India's forex reserves is capable to provide 11 months of goods imports cover and 96% of external debt outstanding, says RBI governor Sanjay Malhotra.

RBI Governor Sanjay Malhotra: FPI investments through India dropped sharply to $1.7 billion

CPI Inflation projections

Earlier - Now

FY26: 4.0%- 3.7%

Q1FY26: 3.6%- 2.9%

Q2FY26: 3.9%- 3.4%

Q3FY26: 3.8%- 3.9%

Q4FY26: 4.4%- 4.4%

RBI governor Sanjay Malhotra on June 6 said the likely above normal monsoon along with early onset augers well the economy. Need to remain watchful of weather related uncertainties and global trade policies, he added.

Outlook for inflation is benign, said RBI governor Sanjay Malhotra. He also said that inflation expectations are showing moderating trend.

RBI kept the GDP forecast for FY26 unchanged at 6.5 percent.

GDP growth projections unchanged

FY26 -6.5%

Q1FY26 -6.5%

Q2FY26 -6.7%

Q3FY26 -6.6%

Q4FY26 6.3%

RBI Governor Sanjay Malhotra on June 6 said merchandise exports recorded a strong growth in April 2025. Trade policy uncertainty continues to weigh on exports

RBI Governor Sanjay Malhotra: Agriculture sector remains strong, with a very good harvest

-Private consumption remains healthy with gradual rise in spending

-RBI Governor Sanjay Malhotra: Services sector is expected to maintain momentum.

=Non-oil non-gold imports reflected double digit growth

Markets turned green after Malhotra announced 50n bps cut. Sensex now in green - up 150 points reacting to the key rate announcement.

RBI governor Sanjay Malhotra: MPC also felt that under presence circumstances there is limited room to support growth.

He also said food inflation is also expected to remain benign, with easing of international commodity prices in line with the anticipated global growth slow down

RBI governor Sanjay Malhotra: MPC front-loading rate cut to support growth

RBI governor Sanjay Malhotra, in a major boost, announced a 50 bps policy repo rate cut, more than what polls had predicted.

RBI governor Sanjay Malhotra on June 6 said Indian economy offers immense opportunities to investors - both foreign and domestic.

RBI Governor Sanjay Malhotra: The last mile of this inflation is turning out to be a little more protracted as growth inflation trade offs is becoming more challenging. He also said that the Indian economy is showing a picture of stability.

RBI Governor Sanjay Malhotra: Global backdrop remains fragile and heavily fluid

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said that a 25 basis point rate cut by the RBI is already priced in by the market.

“What will matter more is the RBI’s commentary on growth and inflation projections for financial year 2026. If the central bank lowers its inflation forecast from 4 percent, that could lift market sentiment,” he added.

Trivesh, COO Tradejini: As most of them are anticipating, the MPC may likely to go ahead with a 25 basis point rate cut making it the third in a row. With inflation comfortably below the 4% mark and GDP growth surprising on the upside, the RBI has enough room to support demand without stoking price pressures. A sharper 50 bps cut looks unlikely right now, as the central bank seems to be playing it safe, preferring gradual steps to avoid sending the wrong signal. The focus will also be on forward guidance.

Markets want clarity on how far and how fast the RBI will go. A rate cut, along with a softer inflation outlook and hints of continued liquidity support, bond yields may decline and market sentiment may improve if rates are lowered . That said, the RBI may also flag global risks like sticky US rates and trade tensions, which could influence its pace going forward. Overall, the tone is likely to stay growth-friendly but measured.

All the economists polled by Moneycontrol said the central bank will maintain its ‘accommodative’ stance to support growth.

The policy stance indicates the thinking of the rate-setting panel. An accommodative one shows that the tilt is towards a rate cut, while a neutral stance suggests rate action can happen on either side.

In April 2025, the central bank changed its stance from ‘neutral’ to ‘accommodative.’  Delivering his speech after the April MPC meet, Malhotra said that RBI’s stance provides policy rate guidance, without any direct guidance on liquidity management.

Indian benchmark indices Sensex and Nifty ended their two-day winning streak and began trading on June 6 on a volatile note, as investors awaited the Reserve Bank of India's (RBI's) monetary policy outcome. Global cues remained largely subdued, although India VIX showed signs of cooling, suggesting that there is currently no strong fear in the market. Read more

Rate trajectory

The RBI has generally maintained a data-dependent approach to future rate cuts and refrained from giving any guidance on its potential moves. Still, market watchers will closely examine the language to gauge how deep the cuts could go in this cycle.

Bank of America Securities expects interest rates to be pared till 5.5%, while Societe Generale Group sees the repo rate to drop as low as 5% in this cycle.

Liquidity Measures

Excess cash in the banking system currently stands around 3 trillion rupees, near a three-year high, amid the central bank’s liquidity infusion and record dividend payout to the government. The excess funds have pushed shorter yields down, with those on treasury bills to company bonds all trading near multi-year lows.

A sharp fall in vegetable prices is likely to keep inflation below the RBI’s 4% target in May and June, economists say. An early onset of the monsoon rains, which irrigate about half of the country’s farmland, will also help keep prices in check.

That may push the central bank to revise its inflation forecast lower for the first six months of the fiscal year by 0.4-0.5 percentage points, Citigroup Inc. economists including Samiran Chakraborty wrote in a note this week.

Indian bond yields open almost flat on June 6 ahead of Reserve Bank of India's (RBI) monetary policy. The yield on 10-year benchmark bond opened at 6.249 percent, as compared to 6.246 percent at close in the previous trading session.

Rupee opened 6 paise down on June 6 ahead of Reserve Bank of India's (RBI) monetary policy.

The local currency opened at 85.8590 against the US dollar, as compared to 85.7962 against the greenback at previous close.

The rupee has been under pressure during last few sessions due to dollar demand, equity outflows and a dip in the dollar index, currency experts have said.

Moneycontrol's poll of economists and treasury heads showed Monetary Policy Committee (MPC) of the RBI is likely to cut the repo rate by 25 basis points (bps).

RBI Governor Sanjay Malhotra will be announcing the interest rate decision from 10 am onwards today.

All major news channels, including Doordarshan, will broadcast the address live. You can catch all the action on the official X and YouTube channels of the PIB, RBI, and the Finance Ministry. Moneycontrol will also provide a minute-by-minute account of the press conference through a live blog and related news reports.

Here are the direct links for the livestreaming of the Friday announcement and noon presser by top RBI officials.

https://www.youtube.com/watch?v=tAYb2tLhIJw

https://www.youtube.com/@ministryoffinancegovernmen8364

https://www.youtube.com/@pibindia

Protecting against swings in Indian banking stocks remains relatively cheap ahead of the RBI’s policy decision. The one-month implied volatility spread between the Nifty Bank Index and the benchmark Nifty 50 stands at around 0.9 points, well below the one-year average of 1.8 points, indicating traders see little risk of a policy surprise. On Thursday, the most actively traded contracts were Nifty Bank’s June 56,000-rupee calls and puts.

The stock market will likely see a muted start today, as signalled by the GIFT Nifty index that is trading at the flatline.

At 7.50 am, the GIFT Nifty index was quoting 24,847.5, lower by 7 points or 0.03 percent.

The Reserve Bank of India (RBI) may go for a ”jumbo rate cut” of 50 basis points on Friday to reinvigorate the credit cycle and counterbalance uncertainties, said SBI research report.

RBI’s rate-setting panel Monetary Policy Committee (MPC) will start deliberations on the next bi-monthly monetary policy on June 4 and announce the decision on June 6 (Friday).The central bank reduced the key interest rate (repo) by 25 bps each in February and April, bringing it to 6 per cent.

"We expect a 50-basis point rate cut in June 25 policy as jumbo rate cut could act as a counterbalance to uncertainty,” said the research report from the State Bank of India’s Economic Research Department – ’Prelude to MPC Meeting – June 4-6, 2025’.