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2w ago

RBI likely to cut repo rate for third straight meeting on June 6

Retail inflation at a nearly six-year low grants the central bank scope to cut rates again.

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RBI MPC: 25 bps rate cut on the cards? Here's all you need to know
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Overview

  • The RBI reduced its repo rate by 25 basis points in February and April, bringing it down to 6 percent ahead of the June policy review.
  • Most economists expect a further 25-basis-point cut on June 6, which would lower the repo rate to 5.75 percent.
  • State Bank of India research calls for a jumbo 50-basis-point reduction to revive the credit cycle and counter ongoing global uncertainties.
  • CPI inflation eased to about 3.2 percent in April, marking its lowest reading since July 2019 and staying below the 4 percent target.
  • System liquidity remains in surplus, reinforcing expectations that the RBI will maintain an accommodative stance to support growth.