RBI MPC expected to cut repo rate by 25 bps on June 6 | CNBC-TV18 Poll

The Reserve Bank of India (RBI) is set to announce its rate cut decision on Friday, June 6. According to a CNBC-TV18 poll, the central bank is widely expected to reduce the repo rate for the third consecutive time at the upcoming meeting. Here’s a look at the key findings from the poll.1 / 7Rate Cut | Most analysts predict that the RBI will cut rates again, citing persistently low inflation and weaker economic growth. Inflation remains below the 4% target, and first-quarter growth may miss forecasts, pressuring the inflation-targeting central bank to act. Around 90% of respondents expect a 25-basis-point cut, lowering the repo rate from 6% to 5.75%. A smaller group anticipates a deeper, 50-basis-point cut to stimulate credit and sentiment.2 / 7Terminal Policy Rate | Most analysts expect the RBI to lower the repo rate to 5.5% by the end of this rate-cut cycle, making it the briefest and least aggressive easing phase in over a decade. Some even predict a terminal rate of 5.25%, pointing to cumulative cuts of 50–75 basis points from current levels.3 / 7Rate Cut Easing Cycle | According to the poll, the RBI may halt rate cuts by December, though some respondents believe the cycle could conclude as soon as August.4 / 7GDP Forecast | The RBI is likely to keep its gross domestic product (GDP) growth forecast steady at 6.5% for the year but might highlight concerns about risks stemming from ongoing global trade tensions.5 / 7CPI Forecast | The inflation outlook could see a downward revision. Given that consumer price inflation (CPI) inflation has remained below 4% for three consecutive readings, most analysts expect the RBI to trim its forecast by 10-20 basis points—or even more—potentially paving the way for additional rate cuts.6 / 7Liquidity | Liquidity is expected to remain ample, with core liquidity in surplus following a record dividend transfer from the RBI. The poll indicates that no significant moves are anticipated on that front.7 / 7Key Things to Watch | Market participants will closely watch the RBI’s guidance on global economic trends. The policy may include updates on liquidity management and new measures to enhance transmission, such as extending external benchmark-linked lending rates (EBLR) to non-banking financial companies (NBFCs). While the rate cut itself might be widely anticipated, the tone and guidance from the RBI will be crucial for markets to interpret, according to the poll.Continue Reading

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