RBI May Have Hit Pause Button on Rate-Cut Cycle

It seems central bank has emptied its bag of goodies for now after frontloading rate cut

- Dipak Mondal @ New Delhi

The RBI has gone all-out in its June 2025 monetary policy to turbo-charge the economy and boost consumption. It seems the central bank has emptied its bag of goodies for now after a 50 basis points cut in the repo rate against an expectation of a 25 bps cut, followed by an announcement of a 100 bps cut in the cash reserve ratio (CRR) in a phased manner.

With 100 bps cuts since the February policy, many analysts, reading between the lines of the latest monetary policy statement, have inferred that the RBI might pause the rate cut cycle for now. "While we see no scope of further cuts in the near term, it would be pertinent to keep an eye on fluid global markets and the evolving domestic cycle to assess any room for additional easing," says Madhavi Arora, chief economist, Emkay Global. She underlines that RBI stance reversion to 'neutral' implies limited room for further easing.

Frontloading rate, CRR cut