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RBI governor Sanjay Malhotra to announce monetary policy today; some predict ‘jumbo rate cut’. What to expect?
The Monetary Policy Committee (MPC), the RBI's rate-setting panel, started its three-day deliberations on Wednesday.
Reserve Bank of India (RBI) governor Sanjay Malhotra will announce the bi-monthly monetary policy on Friday, June 6, amid trade tensions caused by US President Donald Trump's tariffs.
The Monetary Policy Committee (MPC), the RBI's rate-setting panel, started its three-day deliberations on Wednesday.
The central bank reduced the key benchmark lending rate (repo) by 25 basis points each in February and April this year on the recommendations of the governor-headed MPC. But what is expected out of Friday’s announcement?
What to expect from the RBI's monetary policy announcement?
The widespread expectation from Friday's RBI monetary policy announcement is of a third consecutive rate cut of 25 basis points or even bigger to propel economic growth against the backdrop of trade tensions triggered by Trump tariffs.
Governor Sanjay Malhotra will present the monetary policy statement at 10 AM on Friday.
Most experts believe that the RBI will reduce the repo rate by 25 basis points this time. A research report by the State Bank of India (SBI) has raised expectations even higher, predicting a jumbo rate cut of 50 basis points.
An RBI assessment suggests that most of the country's banks have reduced their repo-linked external benchmark-based lending rates (EBLRs) and the marginal cost of funds-based lending rate (MCLR) in response to the 50-bps cut in the policy repo rate since February 2025.
A lowering of the repo rate leads to a reduction in banks' lending rates, which, in turn, brings down EMIs for retail and corporate borrowers.
The MPC, which decides the monetary policy, consists of three members from the RBI and three external members appointed by the government. Governor Sanjay Malhotra, Deputy Governor M Rajeshwar Rao, and Executive Director Rajiv Ranjan are the MPC members from the RBI quota. The three external members include Nagesh Kumar, Director and Chief Executive, Institute for Studies in Industrial Development, New Delhi; Shri Saugata Bhattacharya, Economist, Mumbai; and Professor Ram Singh, Director, Delhi School of Economics, Delhi.
