Monetary Policy Review – June 2025: RBI Surprises with Aggressive Moves to Support Growth : Apurv Gourav
Monetary Policy Review – June 2025: RBI Surprises with Aggressive Moves to Support Growth In a bold and unexpected move, the Reserve Bank of India’s Monetary Policy Committee (MPC) announced a 50 basis points (bps) cut in the policy repo rate, bringing it down to 5.5% , while simultaneously shifting the policy stance from ‘accommodative’ to ‘neutral’. This aggressive frontloading of monetary easing indicates a clear prioritization of growth support amid a benign inflation environment. The decision saw 5 out of 6 MPC members voting in favors of a 50bps cut , with one opting for a more conservative 25bps reduction. Adding to the surprise, the RBI also reduced the Cash Reserve Ratio (CRR) by 100bps , to be implemented in four equal tranches of 25bps each starting from September 6, 2025 , followed by tranches on October 4, November 1, and November 29 . This move is expected to infuse approximately ₹2.5 trillion of additional liquidity into the banking system by December 2025. RBI...