Third RBI Rate Cut of Year Likely This Week

Slowing growth, cooling inflation set stage for 25 bps repo cut

- Abirami S. & Gopika Gopakumar

The Reserve Bank of India's Monetary Policy Committee (MPC) is likely to announce its third consecutive rate cut this week, a Mint poll of economists and treasury heads found, after the economy grew at its slowest pace in four years amid persisting global uncertainties.

Out of the 15 respondents, 14 said the central bank's rate-setting panel will unanimously vote for a 25 basis points repo rate cut to 5.75%, keeping the policy stance unchanged at accommodative. The MPC is expected to announce the decision on 6 June.

"We expect the MPC to repeat the 25bps repo rate cut in the June policy meeting to 5.75%, with terminal rate in the ongoing policy cycle seen at 5.50% by August. Subdued inflation trending below 4% target in FY26, amid growth slowdown concerns in an uncertain and volatile world, is likely to drive the monetary policy committee to persist with growth heavy lifting," said Kanika Pasricha, chief economic advisor, Union Bank of India.