New Delhi, June 4
The Reserve Bank of India’s Monetary Policy Committee (MPC) meeting kicked off on Wednesday to decide on the third repo rate cut and according to economists and industry experts, the Central Bank is likely to go for a third 25 bps cut in the repo rate to 5.75 per cent.
Chaired by RBI Governor Sanjay Malhotra, the committee’s decision will be announced on June 6. The Reserve Bank has already reduced the repo rate by 50 basis points in the previous two monetary policy reviews, lowering it to 6 per cent.
Market participants are now watching closely for signs of a potential third rate cut, as expectations build for further monetary support to boost domestic growth amid worsening global macroeconomic conditions.
The RBI’s dovish turn is primarily driven by two macroeconomic indicators: benign inflation and signs of cyclical slowdown.
Headline CPI inflation remains consistently below the RBI’s medium-term target of 4 per cent, while GDP growth appears to be softening due to external shocks such as trade disruptions from recent US policy moves.
Several rating agencies and global institutions have downgraded India’s GDP growth projections for FY26. Although the RBI maintained its 6.5 per cent growth estimate in April, others have revised expectations to a 6.0 per cent–6.3 per cent range.