With headline inflation softening to multi-month lows, members of the Reserve Bank of India’s Monetary Policy Committee (MPC) see space opening up for further policy easing, provided inflation remains under control and growth remains fragile.Speaking exclusively to CNBC-TV18, Ram Singh and Nagesh Kumar, both members of the MPC, said the current economic environment justifies the recent rate cuts and leaves the door open for more if required.
“The inflationary outlook has turned very benign,” said Nagesh Kumar, citing recent data that showed May inflation at 2.8%, the lowest in over six years.
However, both members flagged oil prices and geopolitical risks as key variables in the outlook. “There is a lot of uncertainty at the moment. When the MPC met in June, oil was around $65 a barrel. Now it’s crossed $80 due to the Iran-Israel conflict,” Kumar pointed out. “We really have to keep an eye on how things are playing out.”
Ram Singh emphasised that the shift in stance from accommodative to neutral should not be seen as a signal that the rate-cutting cycle is over. “Our change in stance to neutral territory does not eliminate the options available in an accommodative stance,” Singh said. “It just adds one more degree of freedom to our decision-making.”Both members highlighted weak urban demand, subdued private investment, and ongoing global uncertainty as reasons to remain flexible on policy. Singh said he is not particularly worried about achieving the 6.5% growth target, but warned that global uncertainty and any unexpected food inflation shocks are risks that must be watched closely.The Reserve Bank of India (RBI) on Friday, June 20, released the minutes of the Monetary Policy Committee (MPC) meeting held between June 4–6, 2025, shedding light on the rationale behind the 50 basis points repo rate cut to 5.5% and a 100 basis points reduction in the cash reserve ratio (CRR).The minutes show that all members voted for a cut because of the decisive fall in inflation and some concerns over growth.On the stance, the highlight is that both Governor Sanjay Malhotra and RBI member Rajiv Ranjan were at pains to point out that the move to neutral does not signify a change in the rate-cutting cycle, but more of a pause.Watch accompanying video for entire discussion.
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