Financial News: India Cuts Key Rates By 50 Bps; Shifts

India Cuts Key Rates By 50 Bps; Shifts Stance To Neutral

06/06/2025 - 01:57:00 (RTTNews)

(RTTNews) - India's central bank lowered its interest rates by 50 basis points on Friday, marking the third consecutive reduction and also shifted its monetary policy stance to neutral. At the three-day meeting, the Monetary Policy Committee of the Reserve Bank of India, led by Governor Sanjay Malhotra, decided to cut the policy repo rate by 50 basis points to 5.50 percent.

Markets anticipated only a quarter point reduction. The bank has reduced the repo rate by 25 basis points each in February and April.

Five members of the MPC voted to cut the rate by 50 basis points, while one member called for a quarter-point reduction.

"After having reduced the policy repo rate by 100 bps in quick succession since February 2025, under the current circumstances, monetary policy is left with very limited space to support growth," the bank said.

"Hence, the MPC also decided to change the stance from accommodative to neutral," RBI added.

The governor said the changes in growth-inflation dynamics call for not only continuing with the policy easing but also frontloading the rate cuts to support growth. Malhotra said, ".today's monetary policy actions should be seen as a step towards propelling growth to a higher aspirational trajectory."

In order to provide durable liquidity, the MPC decided to reduce the cash reserve ratio by 200 basis points to 3.0 percent.

The bank today downgraded its inflation forecast for the current financial year to 3.7 percent from 4.0 percent. Real economic growth for 2025-26 was projected at 6.5 percent, which was unchanged from the previous outlook.

For comments and feedback: contact editorial@rttnews.com

Market News provided by RTTNews

RECENT INTERNATIONAL FINANCIAL NEWS

U.S. Consumer Sentiment Improves Slightly More Than Previously Estimated In June (06 hr(s), 52 min(s), 15 sec(s) ago)
(RTTNews) - A report released by the University of Michigan on Friday showed consumer sentiment in ...Full Story»

U.S. Consumer Prices Inch Up In Line With Expectations But Core Price Growth Exceeds Estimates (07 hr(s), 16 min(s), 15 sec(s) ago)
(RTTNews) - While the Commerce Department released a closely watched report on Friday showing cons ...Full Story»

Brazil Jobless Rate Falls To 6.2% (07 hr(s), 20 min(s), 15 sec(s) ago)
(RTTNews) - Brazil's unemployment rate decreased in the three months ending in May, figures fr ...Full Story»

Turkish Economic Confidence Steady At 96.7 (07 hr(s), 39 min(s), 15 sec(s) ago)
(RTTNews) - Turkey's economic sentiment remained stable in June after rising marginally in the ...Full Story»

Iceland Inflation Rises To 4.2% (08 hr(s), 12 min(s), 15 sec(s) ago)
(RTTNews) - Consumer price inflation in Iceland accelerated in June after easing in the previous m ...Full Story»

Eurozone Economic Sentiment Falls Unexpectedly (08 hr(s), 22 min(s), 15 sec(s) ago)
(RTTNews) - Eurozone economic sentiment weakened unexpectedly in June primarily driven by reduced ...Full Story»

Belgium Inflation Rises To 2.15% (08 hr(s), 38 min(s), 15 sec(s) ago)
(RTTNews) - Belgium's consumer price inflation rose for the first time in five months in June ...Full Story»

U.S. Consumer Prices Inch Up 0.1% In May, In Line With Estimates (08 hr(s), 43 min(s), 15 sec(s) ago)
(RTTNews) - The Commerce Department released a closely watched report on Friday showing consumer p ...Full Story»