RBI Cuts Repo Rate by 50 Bps to 5.50% to Balance Inflation Target and Growth

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RBI repo rate cut 2025

Monetary Policy Statement Dated, 06-06-2025

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), chaired by Governor Sanjay Malhotra, held its 55th meeting from June 4 to 6, 2025.

1. Key Policy Decision – Repo Rate Slashed to 5.50%

In a significant move aimed at balancing inflation control with economic growth, the MPC has reduced the policy repo rate by 50 basis points, bringing it down from 6.00% to 5.50%.

2. Revised Policy Rates

Following the repo rate cut, the key lending and borrowing rates stand revised as follows:

  • Policy Repo Rate – 5.50%
  • Standing Deposit Facility (SDF) Rate – 5.25%
  • Marginal Standing Facility (MSF) Rate – 5.75%
  • Bank Rate – 5.75%

3. Rationale – Inflation Target and Growth Support

The decision aligns with the RBI’s monetary policy framework, which aims to maintain Consumer Price Index (CPI) inflation at 4% within a tolerance band of ±2%. At the same time, the cut is intended to stimulate economic growth, especially in sectors sensitive to interest rates, such as housing, infrastructure, and consumer demand.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied