New Delhi, June 10, 2025.
RBI Monetary Policy Committee (MPC) has cut Repo rate by 50 bps, significantly higher than estimates. The big change is the stance adopted by RBI. The Reserve Bank has now changed its stance to ‘Neutral.’ Food inflation outlook soft and core inflation outlook benign. The inflation outlook for the year has been revised downwards to 3.7%. GDP growth seen lower amidst global challenges.
Shanti Ekambaram, Deputy Managing Director, Kotak Mahindra Bank, Said “The RBI has made a clear and decisive call to propel economic growth, deploying all key policy levers in a bold and timely manner. By front-loading a 50 basis point repo rate cut and infusing durable liquidity through a 100 basis point CRR reduction, the RBI has demonstrated its commitment to ensuring effective monetary transmission. With inflation softening, liquidity conditions comfortable, and financial stability intact across banks, NBFCs, and corporates, the macroeconomic environment is ripe for sustained growth. The shift to a neutral policy stance signals that while further rate cuts may be limited, the current policy remains sufficiently accommodative. As the Governor rightly emphasized, price stability alone is not enough — a supportive policy framework is essential in uncertain times to nurture growth and build economic momentum”
Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank Said “The higher than expected Repo rate cut comes along with a shift in the stance back to neutral. This clearly points towards future decisions being more data dependant given the significant global uncertainties. Furthermore, the sharp drop in CRR is likely to keep liquidity conditions suitably comfortable to ensure monetary transmission.”
“The RBI has made a clear and decisive call to propel economic growth, deploying all key policy levers in a bold and timely manner. By front-loading a 50 basis point repo rate cut and infusing durable liquidity through a 100 basis point CRR reduction, the RBI has demonstrated its commitment to ensuring effective monetary transmission. With inflation softening, liquidity conditions comfortable, and financial stability intact across banks, NBFCs, and corporates, the macroeconomic environment is ripe for sustained growth. The shift to a neutral policy stance signals that while further rate cuts may be limited, the current policy remains sufficiently accommodative. As the Governor rightly emphasized, price stability alone is not enough — a supportive policy framework is essential in uncertain times to nurture growth and build economic momentum.” Said Manish Kothari, Group President and Head – Commercial Banking
