The Reserve Bank of India (RBI) slashed its repo rate by a surprising 50 basis points to 5.50% on June 6, 2025, marking its third consecutive cut this year, as announced by Governor Sanjay Malhotra after the Monetary Policy Committee (MPC) meeting. This follows two 25-basis-point reductions in February and April, totaling a 100 basis point cut in 2025, the first easing since May 2020. With retail inflation dropping to a six-year low of 3.16% in April, well below the RBI’s 4% target, the central bank shifted focus to bolstering economic growth. Malhotra emphasized that core inflation remains benign, providing room for growth oriented policies.

India’s economy, resilient with a 7.4% GDP growth in Q1 2025, is projected to grow at 6.5% for FY26, with quarterly estimates of 6.5%, 6.7%, 6.6%, and 6.4%. Malhotra noted India’s ambition for higher growth amidst global uncertainties, with the accommodative stance signaling further support.