Overview

• On June 6, the Monetary Policy Committee voted by a 5-1 margin to cut the policy repo rate by 50 basis points to 5.5% and move its stance from accommodative to neutral.
• Economist Saugata Bhattacharya was the lone dissenter, arguing for a more measured 25 bps cut due to elevated global uncertainty.
• India’s retail inflation fell to 2.82% in May from 3.16% in April, strengthening the case for further monetary support.
• The RBI has injected ₹9.5 lakh crore of durable liquidity into the banking system since January to hasten the transmission of rate cuts.
• Barclays projects an additional 25 bps repo rate reduction in the final quarter of calendar 2025 if inflation continues to undershoot forecasts.