RBI cuts repo rate by 50 basis points to 5.5%

RBI cuts repo rate by 50 basis points to 5.5%

Mangalore Today News Network

Mumbai, June 6, 2025: The Reserve Bank of India (RBI) has slashed its key lending rate, or the repo rate, by 50 basis points to 5.5%. The decision was taken unanimously at the bi-monthly Monetary Policy Committee meeting headed by RBI Governor Sanjay Malhotra.

This comes as a relief for borrowers who may expect lower EMIs for long-term loans, especially home buyers.

The global backdrop remains fragile and global trade projections have been revised downwards, he pointed out, asserting that India would continue to grow faster.

"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 and we aspire to grow faster," said the RBI Governor.

Mr Malhotra said inflation has softened significantly, and the near-term and medium-term outlook exudes confidence. Food inflation outlook remains soft, and core inflation is expected to remain benign, he said.

The RBI also projected that retail inflation for the current financial year to be at 3.7% against its April projection of 4%.

The various economic indicators remain strong, with the RBI Governor pointing to a gradual rise in discretionary spending and healthy private consumption. Industrial activity is gaining gradually while the services sector is expected to maintain momentum, he said. Rural demand remains steady while urban demand is improving.

The RBI also projected the Gross Domestic Product (GDP) growth at 6.5% in the current financial year. The quarterly projections are: 2.9% (April-June), 3.4% (July-September), 3.9% (October-December), and 4.4% (January-March).