June 6, 2025 - The Reserve Bank of India (RBI) today, June 6, announced a significant monetary policy shift, cutting the Repo Rate by 50 basis points to 5.5%. This marks the third consecutive rate cut this year, totalling a 1% reduction so far. The decision was taken unanimously during the RBI Monetary Policy Committee (MPC) meeting held from June 4 to 6.

This rate cut comes as a relief for borrowers, especially for those going in for home loans, because EMIs for long-term loans could get easier.

The RBI also lowered the Cash Reserve Ratio (CRR) by 100 basis points, injecting Rs 2.5 lakh crore into the banking system to enhance liquidity and stimulate economic activity.

RBI Governor Sanjay Malhotra emphasised that this proactive approach aims to support growth amid reduced inflation concerns. He observed that the global economy remains fragile but, going forward, India’s economy is looking positive.

"India's strength comes from the strong balance sheets of the five major sectors. The Indian economy offers immense opportunities to local and foreign investors. We are already growing at a fast rate. We aspire to grow faster," the Governor said.

The Central Bank revised its annual inflation forecast down from 4% to 3.7% and maintained its GDP growth projection at 6.5%. The inflation has softened significantly and the near-term and medium-term outlook looks good, according to the RBI.

This policy change reflects the RBI's shift from an Accommodative to a Neutral stance, indicating a balanced approach to future monetary policy decisions.