RBI MPC Meeting: Schedule for FY 2025-26 Monetary Policy Meetings

The Reserve Bank of India (RBI) announced its first monetary policy decision under the leadership of Governor Sanjay Malhotra in February 2025. In the latest RBI MPC Meeting 2025, the Monetary Policy Committee (MPC) has decided to cut the repo rate by 50 basis points (bps) to 5.50%. 

Key Takeaways from RBI MPC Meeting June 2025

Surprise 50 bps Repo Rate Cut to 5.50%

The RBI lowered the repo rate by 50 basis points to 5.50% to boost growth amid global uncertainties. Governor Malhotra cited a significant easing in inflation—from above tolerance in late 2024 to 3.2% in May 2025—as the reason for the larger cut.

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Policy Stance Shifts from ‘Accommodative’ to ‘Neutral’

The central bank moved to a neutral stance, reflecting a more balanced outlook. The inflation forecast for FY26 was revised down to 3.7%, signaling confidence in stable and moderate price pressures ahead.

Growth Forecast Maintained at 6.5% for FY26

Despite global risks, RBI kept its GDP growth estimate steady at 6.5% for FY26, supported by strong domestic consumption and investment.

Core Inflation Stable with Benign Price Trends

Core inflation remains steady, and the RBI expects continued softening in key price segments, helping keep inflation comfortably below 4% this year.

Current Account Deficit Low; Forex Reserves Strong

The CAD for FY25 is projected to stay low, with FY26 remaining sustainable. Forex reserves stand at $691.5 billion, covering over 11 months of imports and nearly all external debt.

Economic Resilience Despite Microfinance Stress

While overall economic conditions are stable, stress in the microfinance sector continues. However, pressure in unsecured loans and credit cards has eased.

Ongoing Vigilance on Liquidity

The RBI will keep a close watch on liquidity and financial markets, ready to act as needed to maintain stability amid changing conditions.

RBI MPC Meeting Schedule for FY 2025-26

The following table outlines the upcoming schedule for the RBI Monetary Policy Meetings for the financial year 2025-26. While some dates are confirmed with the next MPC meeting on April 7 to April 9, 2025, others are yet to be announced. This table will be updated as more information becomes available.

Implications of the Rate Cut

• Impact on Borrowers – With the repo rate now at 5.50%, borrowing costs for home loans, car loans, and business credit are expected to decline, making credit more affordable and accessible.
• Impact on Investors – Lower interest rates typically boost equity markets by reducing corporate borrowing expenses and supporting earnings growth. Equities surged after the announcement, with the Nifty 50 up 0.68%, Sensex rising 0.70%, and Bank Nifty climbing 1.28%, reflecting optimism about liquidity and lending conditions. At the same time, bond yields may fall, potentially leading to softer returns in debt markets.
• Impact on Inflation – The RBI has revised its inflation target downward to 3.7% for FY26, reflecting expectations of continued moderation in core and food inflation. This rate cut is aligned with a confident outlook that inflation will stay well below the previous 4% target without destabilizing price levels.
• Impact on Economic Growth – The rate cut is intended to support economic growth by stimulating demand in key sectors like real estate, manufacturing, and infrastructure, which are particularly sensitive to interest rate changes.

Conclusion

The RBI’s 50 bps rate cut to 5.50% and shift to a ‘Neutral’ stance signal a calibrated approach to support growth while keeping inflation under control. With a steady growth forecast of 6.5% for FY26 and a phased CRR cut planned, the RBI aims to maintain liquidity and ensure economic stability amid global uncertainties. This balanced strategy reflects the central bank’s focus on sustainable development going forward.