In a major move to support economic momentum, the Reserve Bank of India’s Monetary Policy Committee (MPC) on Friday, June 6, 2025, announced a 50 basis points cut in the policy repo rate, bringing it down to 5.5% with immediate effect.
Addressing the press from Mumbai, RBI Governor Sanjay Malhotra emphasized India’s strong and stable economic fundamentals despite global uncertainties. “India’s economy stands out as a beacon of strength, stability, and opportunity,” he said.
Malhotra highlighted that the country is witnessing rapid economic growth and reaffirmed the government’s commitment to accelerating development as part of the “Viksit Bharat” vision. He also invited global investors to tap into the vast opportunities available in the Indian market.
Giving an update on inflation, the Governor stated that the forecast for FY2025-26 has been revised down from 4% to 3.7%, reflecting easing price pressures. However, he cautioned that after cumulative rate cuts totaling 100 basis points, the central bank now has limited room for further monetary easing.
Malhotra noted that the government’s sustained focus on capital expenditure is expected to drive a revival in private investment. “We will now take a more data-driven approach, carefully assessing income and macroeconomic indicators to guide future decisions,” he said.
Despite external headwinds such as geopolitical tensions and unpredictable weather patterns, the RBI has maintained its GDP growth projection for the current fiscal at 6.5%.
He further stated that the current account deficit for FY2024-25 is likely to stay low, and it will remain within a sustainable range in the next fiscal as well. On the inflation front, core inflation remains largely stable, and the outlook for essential goods suggests continued price moderation.
