On Friday, RBI cut repo rate by 50 bps to 5.5%, and marks the third reduction in 2025. The bank also shifted its financial coverage stance from ‘accommodative’ to ‘neutral,’ show a more balanced method to address growth and inflation going forward. Following the cost reduction, the Standing Deposit Facility (SDF) price revised to 5.25 percent and the Bank Rate adjusted to 5.75 percent.
RBI cut repo rate by 50 bps to 5.5%
The decision taken during 55th meeting of the Monetary Policy Committee (MPC), held from June 4 to 6, under chairmanship of RBI Governor Sanjay Malhotra. The Governor emphasized that the Indian economic system maintains to show “strength, stability and opportunity” amid global concerns.
“The Indian economy develops at a completely fast pace, and all efforts are being made to grow even quicker in our vision of Viksit Bharat,” he said.
India’s financial system grew by 7.4 percent in Q4 FY25
India’s economy grew by 7.4 % year-on-year in the last sector of the economic year that ended on March 31 (FY25), surpassing expectancies and driven by robust performance in the construction, manufacturing, and services sectors. However, the overall fiscal year FY25 recorded a grow rate of 6.5 per cent, the average in 4 years, reflecting challenges in sustaining momentum.
The RBI retained its GDP growth forecast for 2025-26 (FY26) at 6.5 percent, despite blended signs from the global financial system and potential risks from geopolitical tensions and change policy uncertainties. However, it revised the quarterly increase projections after RBI cut repo rate by 50 bps to 5.5%
Q1 FY26: 6.5 per cent (revised from 6.5 per cent)
Q2 FY26: 6.7 per cent (revised from 6.7 per cent)
Q3 FY26: 6.6 per cent (revised from 6.6 per cent)
Q4 FY26: 6.3 per cent (revised from 6.3 per cent)
The valuable bank stated robust momentum in investment pastime, advanced stability sheets across sectors, government capital expenditure, and a promising agricultural outlook as key drivers of the increase.
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