THE JHARKHAND STORY DESK
Mumbai, June 6: In a significant move to stimulate liquidity, the Reserve Bank of India (RBI) on Friday slashed the Cash Reserve Ratio (CRR) by 100 basis points, bringing it down from 4 per cent to 3 per cent in four stages. This is expected to release approximately ₹2.5 lakh crore into the banking system.
Simultaneously, the Monetary Policy Committee (MPC) reduced the policy repo rate by 50 basis points to 5.5 per cent, effective immediately. RBI Governor Sanjay Malhotra cited easing inflation and a favourable outlook as key reasons for this cut.
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The RBI also revised its policy stance from “accommodative” to “neutral,” signaling a more data-driven approach going forward. Governor Malhotra remarked, “The MPC will carefully assess incoming data and the evolving outlook to ensure a balanced approach to growth and inflation.”
Inflation, which has steadily declined over the past six months, now stands at 3.2 per cent as of April 2025. The RBI revised its CPI inflation projection for 2025-26 down to 3.7 per cent from the earlier 4 per cent forecast. Quarterly inflation projections are now set at 2.9 per cent for Q1, 3.4 per cent for Q2, 3.9 per cent for Q3, and 4.4 per cent for Q4.
Despite the rate cuts, the central bank retained its GDP growth projection for 2025-26 at 6.5 per cent, with quarterly growth expected at 6.5 per cent, 6.7 per cent, 6.6 per cent, and 6.3 per cent respectively.
Governor Malhotra stressed that the recent policy adjustments aim to support economic growth while maintaining price stability amid easing global commodity prices and expectations of a global growth slowdown.
