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More room for monetary policy easing: FinMin

Business Standard

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July 29, 2025

With inflation comfortably below the Reserve Bank of India's (RBI's) 4 per cent median target and likely to undershoot its 3.7 per cent projection for 2025-26 (FY26), there is room for the monetary policy easing cycle to be sustained, the Finance Ministry said on Monday.

- Ruchika Chitravanshi

The comments, featured in the ministry's Monthly Economic Review for June 2025, assume significance ahead of the Monetary Policy Committee (MPC) meeting of the Reserve Bank of India (RBI) scheduled to begin from August 5.

The MPC has lowered the interest rate by 100 basis points (bps) between February and June in view of receding inflation and to support economic growth.

While signaling that subdued core inflation affords room for the RBI to cut rates, the review, authored by officials in the Department of Economic Affairs, acknowledged that credit growth of scheduled commercial banks (SCBs) has moderated to 10.4 per cent as of June 27, compared to 13.9 per cent a year ago.

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