🔻 RBI MPC Outcome (June 2025)
Repo Rate Cut
RBI has reduced the repo rate by 50 basis points from 6% to 5.5%.
This exceeds market expectations, which had anticipated a 25 basis points cut to 5.75%.
This marks a cumulative 100 bps cut since February 2025, significantly easing lending conditions.
💸 Impact on Borrowers
The lower repo rate will result in cheaper loans and reduced EMIs.
This is expected to benefit loan borrowers with lower interest rates.
🧭 Policy Stance Change
The MPC has shifted the monetary policy stance from “accommodative” to “neutral”.
This indicates reduced scope for further rate cuts in the near term.
🔍 Outlook & Assessment
The MPC will closely monitor incoming economic data and global developments.
Emphasis will be placed on balancing growth and inflation amidst growing global uncertainty.
🌍 Global Economic Context
This decision comes amid global instability due to US President Donald Trump’s reciprocal tariffs.
The previous policy had already warned about the potential global economic turmoil arising from trade wars.
🏦 Liquidity Measures: CRR Cut
The RBI has decided to cut the Cash Reserve Ratio (CRR) by 100 basis points from 4% to 3%.
Staggered reduction in four tranches in 2025:
Sept 6: 25 bps
Oct 4: 25 bps
Nov 1: 25 bps
Nov 29: 25 bps
This is expected to inject ₹2.5 lakh crore primary liquidity into the banking system by the end of November 2025.
