RBI Poised to Cut Rates as India Eyes Takeoff

As India enters a new fiscal year marked by evolving global complexities and domestic resilience, the monetary policy focus is likely to continue towards supporting growth, without compromising price stability.

- Kaushik Das

The Reserve Bank of India (RBI) is expected to deliver another 25 basis points (bps) repo rate cut in its June 6 policy meeting, bringing the rate down to 5.75% and marking the third consecutive cut since February 2025, signaling a proactive approach to easing financial conditions with the objective of stimulating credit and investment, while ensuring a durable alignment of the 4% CPI target.

The policy stance turned accommodative in April and is likely to continue as RBI balances near-term cyclical risks with a forward-looking view on India's growth prospects.

The central bank will likely maintain its FY26 growth forecast of 6.5%, while possibly lowering its CPI inflation forecast to 3.8%, from 4.0% earlier. In the April policy, RBI revised both the growth and inflation forecasts lower by 20bps to 6.5% and 4.0%, respectively.