RBI governor Sanjay Malhotra during RBI monetary policy in RBI head quarters on Friday noon.
(Express Photo by Amit Chakravarty)RBI MPC Meeting Repo Rate Announcements Live Updates: The Reserve Bank of India’s (RBI) six-member Monetary Policy Committee (MPC) cut the repo rate for a third consecutive time by 50 basis points to 5.5 per cent. Announcing the decision, Governor Sanjay Malhotra also said that the inflation outlook for FY26 has been revised to 3.7 per cent, from the earlier 4 per cent. The MPC also retained the GDP growth forecast for the current fiscal year at 6.5 per cent, stating that “geopolitical tensions and weather vagaries pose headwinds”.
What to expect after repo rate reduction: After a slash in the repo rate by 50 bps, it is expected that all external benchmark lending rates (EBLR) linked to it will decline by a similar margin. As observed in past trends, in February 2025, most banks reduced their rates by the same magnitude. Further, rate cut is likely to benefit the bond market, as falling interest rates typically lead to a rise in bond prices.
CPI declines to 3.7 percent: As per the RBI Governor’s announcement, the MPC estimated CPI inflation for 2025-26 to be at 3.7 percent, lower than the 4 percent estimated earlier. The real GDP growth for 2025-26 is projected at 6.5 per cent. For the financial year 2024-25, the growth rate stood at 6.5 per cent, which was a four-year low.
Hours after RBI's jumbo rate cut, state-owned Punjab National Bank (PNB) on Friday announced up to 50 basis points reduction in lending rate, a move which will help existing and new borrowers.
Other banks are also expected to make similar announcements soon. — PTI
Reacting to the RBI repo rate cut, Sarvjit Singh Samra, MD & CEO, Capital Small Finance Bank, said, “The significant 50-bps repo rate cut to 5.50%, coupled with a substantial yet staggered 100-bps CRR reduction to 3.00%, is a well-calibrated decision that will infuse ₹2.5 trillion into the system. With a 100-bps repo rate cut in 2025 so far, this marks the sharpest easing cycle since the pandemic, aimed at proactively anchoring growth.”
He added, “These steps will ease liquidity, reduce funding costs, and boost borrower confidence. With rural demand strong and signs of investment revival, CSFB is well-placed to expand quality lending in its core market in semi-urban and rural areas. Lower pressure on deposit mobilization will help protect margins, reinforcing our commitment to empowering customers and continue our growth journey with poise and vigour.”
Reacting to the repo rate cut, Saurabh Agrawal, Founder at Saurabh Agrawal & Co. Chartered Accountants, said, :This is a win- win situation for all i.e. for Home Buyers and for MSME and for industry as a whole. Lower interest costs provide an incentive to companies to invest which in turn helps to foster growth. It also brings down the interest cost for companies which helps in stabilizing profits. This will vary across industries as the interest-to-turnover ratio averages around 2-3% for non-financial companies and could stretch to around 10% for capital intensive industries.”
The Reserve Bank on Friday said it has advanced its August Monetary Policy Committee (MPC) meeting by a day due to administrative exigencies.
As per the schedule announced on March 26, 2025, the MPC meeting in August was between August 5-7, the Reserve Bank of India (RBI) said in a statement. — PTI
Benchmark indices Sensex and Nifty surged nearly 1 per cent on Friday, driven by a rally in rate-sensitive sectors following the Reserve Bank's jumbo rate cut of 50 basis points.
Market analysts said in light of benign inflation forecasts, RBI has taken steps to boost growth. A 50 bps repo rate cut supported by phased 100 basis points CRR cut will boost growth and lower the borrowing costs. — PTI
On RBI’s move to slash repo rate, Monarch Goyal, partner, Mechamorph Industries, said, “The RBI's approach to the repo rate has a direct bearing on the manufacturing environment. A positive rate scenario lowers the cost of borrowing, enabling industries such as ours to invest more assertively in R&D, automation, and scaling up. For Mechamorph Industries, this means quicker innovation cycles and increased efficiency in production. Policy continuity is crucial to ensure momentum, particularly for MSMEs and technology-led manufacturers. We consider the repo rate an important driver of industrial growth and stability.”
Vikas Garg, Head – Fixed Income, Invesco Mutual Fund, on the RBI’s monetary policy announced today, said, “The MPC has frontloaded economic growth support measures with a substantial policy rate cut of 50 bps and a phased CRR cut of 100 bps, far exceeding market expectations.”
Garg added, “However, in a balancing move, the policy stance has been changed back to “Neutral” from “Accommodative,” after having shifted in the previous April policy. FY26 inflation projections have been moderated to 3.7% from the earlier 4.0%, citing benign food as well as core inflation. Growth projections have been maintained at 6.5% for FY26, although downside risks persist amidst global uncertainty. With the Neutral stance, future rate cuts will be data-dependent, based on growth-inflation dynamics. We believe that the current policy rate cut, along with the substantial liquidity surplus from the CRR cut, will gradually drive yields lower, with a curve steepening bias.”
The rupee pared initial losses and appreciated 13 paise in morning trade on Friday, after the Reserve Bank cut repo rate by a higher-than-expected 50 basis points to prop up growth.
Forex traders said the latest RBI monetary policy has an all-round focus, it maintained growth momentum, by cutting rates by 50 bps, liquidity infusion by cutting CRR by 100 bps over the year and targeting inflation at 3.7 per cent in FY26. — PTI
On the RBI slashing the repo rate, Ajit K Menon, Chief Operating Officer, Vivriti Capital, on Friday said, “With a balance of price stability, the larger-than-expected repo rate cut and its eventual policy transmission are estimated to kick off credit growth.”
Menon added, “While the macroeconomic headwinds are a concern, India needs to focus on priming growth in domestic demand to counterbalance their impact. On the bright side, the country’s NBFC landscape is healthy as their GNPAs are at comfortable levels, and risks associated with MFI exposures are being priced in.”
Reacting to the RBI’s decision to slash the repo rate by 50 basis points, Ashwani Dhanawat, Executive Director & Chief Investment Officer, Shriram General Insurance Limited said, “The significant 50 basis points cut in the repo rate shows RBI’s focus to spur economic growth. This is the third consecutive rate cut by the central bank in 2025. The committee has signalled a recalibrated approach by shifting its policy stance from ‘Accommodative’ to ‘Neutral’, amid evolving economic dynamics.”
Dhanawat added, “Also, another major move to enhance liquidity in the banking systems and stimulate credit growth is a cut in CRR by 100 bps, from 4% to 3%. These decisions come at a time when retail inflation is at 3.16% is lowest since July 2019 and gives the central bank room to support economic momentum. The increased liquidity and push for economic growth could also stimulate demand for insurance products as businesses expand and consumers have more disposable income.”
Real estate developer Sanjeevini Group Chairman and Founder, Umesh Gowda said, "RBI’s decision to undertake a deep 50bps cut in repo rate and 100 bps cut in CRR in view of the built-up in growth momentum, fall in inflation and geo-political uncertainties, will be a big boost for the overall economy and especially for the housing sector. Home loans have already fallen below the 8% mark and today’s measures will further reduce home loan rates thereby driving demand for mid-income and affordable homes. The Bengaluru housing market is end-use driven with most sales happening in the Rs 50L-2cr bracket. Reduction in home loans will have a far-reaching impact on this market which boasts of strong infrastructure, heightened corporate activity and ample employment opportunities, the major drivers for housing demand."
Sameer Mathur, MD and founder of Roinet Solution, said, "The RBI’s proactive 50 bps rate cut, coupled with a sharp reduction in CRR, signals a strong intent to revive growth momentum. With inflation well within the comfort zone, the central bank is prioritizing liquidity and credit flow to support investment and consumption in a globally uncertain environment.By easing rates while maintaining a neutral stance, the RBI is walking a fine line between reviving growth and anchoring inflation expectations. This calibrated approach underscores confidence in India’s inflation trajectory and macroeconomic fundamentals.” The rate cut and liquidity injection through CRR relaxation are likely to ease borrowing costs across the board. This should boost market sentiment, especially for interest-sensitive sectors like housing, auto, and infrastructure.
With global trade disruptions weighing on India’s growth outlook, the RBI’s decision reflects a timely and bold response. The move will not only support domestic demand but also position India as a relatively resilient economy in a turbulent global landscape."
Aman Sarin, Director & Chief Executive Officer, Anant Raj Limited said, " The RBI’s decision to cut the repo rate by 50 basis points—the third cut this calendar year, following two earlier cuts of 25 basis points each—reflects a clear push towards supporting credit growth and economic activity. For both existing and new borrowers, this cumulative 100 basis point reduction will provide significant relief in terms of reduced interest burden. Additionally, the move is expected to inject more liquidity into the system, further stimulating economic momentum. We believe this will have a positive impact on the real estate sector, particularly the mid- and high-end segments, as interest rates become more affordable, reduced EMI and loan eligibility improves."
Siraj Saiyed, Director, Arete Group, said, "Commercial and industrial real estate will benefit from the RBI's 50 basis point rate cut and CRR reduction, which indicate a firm push for expansion and liquidity infusion. Project viability will be increased, and capital deployment across asset classes will be accelerated, by reduced borrowing costs and better credit availability."
"This policy change will further improve investor sentiment and occupier demand in Gujarat, where the development of industrial corridors and the expansion of logistics are already gaining momentum. This as a chance to expedite the development of infrastructure that will satisfy the changing demands of manufacturing and warehousing while yielding robust, risk-adjusted returns."
Sadaf Sayeed, CEO, Muthoot Microfin, said, "RBI monetary policy is 10/10, it has an all-round focus, maintaining growth momentum, by cutting rates by 50 bps, liquidity infusion by cutting CRR by 100 bps over the year and targeting inflation at 3.7%. “It is great to see both GOI fiscal policy and RBI monetary policy working in tandem to propel the Indian economy to a new growth trajectory. It augurs well for the industry and our country."
Kanika Singh, Chief Risk Officer, IMGC, said, "RBI has cut the repo rate by 50 bps to 5.50% given the continuing downward inflation trend, which is well below the 4% tolerance level. Repo Rate is now at its lowest level in nearly 3 years. Furthermore, to support growth and stimulate the credit cycle in a challenging geopolitical and economic environment, the central bank could consider additional rate cuts during the year. With the repo rate reduction, Home Loan borrowers are definitely expected to benefit. We have already seen some return on investment (ROI) benefits from the previous two rate cuts being passed on to borrowers. With a 50 bps rate cut, the home loan EMIs will come down substantially, provided the transmission occurs in real-time and not with a lag. While global economic outlook continues to remain volatile due to trade policy uncertainty, India’s growth projections remain positive, supported by strong domestic fundamentals aided by the government and, to some extent, private capex. The inflation outlook is also positive, supported by low core inflation and the expectation of a good harvest."
Adhil Shetty, CEO and co-founder of BankBazaar.com, said, "Today’s 50 bps rate cut is likely to push home loan rates closer to the psychologically important sub-8% level. The repo rate now stands at 5.50%, having been cut by a cumulative 100bps since February 2025. The lowest rates in the market are already at 7.85%, largely available to prime borrowers with credit scores above 750, and often in refinance or balance transfer cases. A further rate cut could see sub-8% rates becoming more widespread—something we haven’t seen since early 2022."
"However, the transmission of rate cuts remains uneven. Borrowers with repo-linked home loans will see the fastest and fullest pass-through. But loans taken pre-2019, especially with public sector banks, continue to be linked to older benchmarks like the MCLR or even the Base Rate. These borrowers will not benefit automatically from today’s cut."
"If you’re paying 50 basis points or more above the lowest available rates, and especially if you're in the early years of your tenure, it’s worth exploring a refinance to a repo-linked loan. This can help bring down your interest cost significantly over the life of the loan."
"For depositors, a 50 bps repo rate cut may not slash FD rates overnight, but it does signal the beginning of a downward trend. Banks are likely to start trimming deposit rates, especially for short- and medium-term tenures. If you’ve been waiting to lock in current rates, some of which still hover around 7.5%, now may be the time. Senior citizens, who enjoy an extra 25 to 50 basis points, should consider locking in longer tenures."
This is the first time since Covid-19 that the RBI has passed on three consecutive rate cuts, beginning February 2020.
RBI chief Sanjay Malhotra, however, retained the GDP forecast for the current fiscal at 6.5 per cent. The inflation projection was lowered to 3.7 per cent from the earlier estimate of 4 per cent, supported by expectations of a good monsoon.
RBI Governor announces a reduction in Cash Reserve Ration (CRR) by 100 bps, cut from 4 percent to 3 percent for FY2026.
RBI Governor Sanjay Malhotra announced that the GDP projections for FY2026 remain unchanged at 6.70 percent.
Stating the outcomes of the MPC meeting, RBI Governor Sanjay Malhotra announced a cut in repo rate for third consecutive time by 50 bps to 5.5%
Reserve Bank of India Governor Sanjay Malhotra commenced the announcement MPC meeting outcomes. The repo rate cuts are expected to be announced shortly.
The Nifty 50 opened at 24,748.70, down just 2.20 points or 0.01 per cent. Similarly, the BSE Sensex also opened flat at 81,434.24, down 7.80 points or 0.01 per cent. This comes shortly before RBI MPC will announce its decision regarding the repo rates after their bi monthly meeting.
Sanjay Malhotra will present the monetary policy statement at 10 am on June 6 (Friday), the Reserve Bank said on Thursday.
Most of the experts are of the view that RBI will go for a 25 bps reduction in the repo this time also, though a research report by the State Bank of India (SBI) sees a jumbo rate cut of 50 bps.
In response to the 50-bps cut in the policy repo rate since February 2025, most of the banks have reduced their repo-linked external benchmark-based lending rates (EBLRs) and the marginal cost of funds-based lending rate (MCLR), according to an assessment by the RBI. (PTI)
After the MPC meeting concludes today, RBI Governor Sanjay Malhotra is expected to announce a 25 bps cut in the repo rate. It is likely that CPI will decline to 3 percent for May, which will be the lowest observed consumer price index in the last six years.
