RBI Governor expects rate cut front-loading to support growth

On June 6, MPC reduced benchmark short-term lending rate by 50 bps, taking total reduction to 100 bps in quick succession

- OUR CORRESPONDENT

MUMBAI: RBI Governor Sanjay Malhotra said front-loading of monetary policy rate action would give a clear signal and some certainty to the economic agents that the central bank is supportive of growth amid global tensions, MPC meeting minutes released on Friday said.

On June 6, the RBI governor-headed six-member panel reduced the benchmark short-term lending rate by 50 basis points, taking the total reduction to 100 bps in quick succession, besides a change in the policy stance to neutral from accommodative and liquidity infusion measures.

While five members voted for a 50 bps reduction in the repo rate during the three-day meeting (June 4-6), an external member of the panel, Saugata Bhattacharya, suggested a 25 bps cut.

Given a sharp reduction in inflation of about 3 percentage points over the past few months (6.2 in October 2024 to 3.2 in April 2025) and the projected reduction in annual average inflation by almost one percentage point from 4.6 to 3.7 per cent, Malhotra voted for a 50 bps rate cut, the minutes showed.