Overview

• The repo rate stands at 5.5% under a neutral stance following 100 basis points of reductions since February.
• Retail inflation dropped to a six-year low of 2.1% in June, driven by easing food prices.
• Malhotra said the Monetary Policy Committee will balance price stability and growth before approving any further cuts.
• Transmission of past rate cuts has reduced interest rates by about 24 basis points on new loans and 16 basis points on outstanding credit.
• The RBI is reviewing regulations to allow foreign strategic investors to hold up to 26% in Indian banks and will report on liquidity management reforms by late July.