RBI’s MPC meeting: Will this be the third consecutive rate cut?

The Reserve Bank of India's Monetary Policy Committee (MPC) commenced its deliberation on June 4 which faces new headwinds from global trade uncertainties, particularly US tariff actions under US President Donald Trump.

As the RBI wraps up its three-day monetary policy meeting today, all eyes are now on what could be the third straight interest rate cut of India. Expectations are high, with investors betting on a 0.25 per cent to 0.5 per cent reduction in rates.

Currently, India’s benchmark rate stands at 6 per cent, and a cut could make borrowing cheaper across the board, giving a boost to consumption, financials, and real estate stocks.

In April 2025, the central bank changed its stance from ‘neutral’ to ‘accommodative.’ Delivering his speech after the April MPC meet, RBI Governor Sanjay Malhotra said that RBI’s stance provides policy rate guidance, without any direct guidance on liquidity management.

Inflation has cooled in recent months and now sits comfortably below the RBI’s 4 per cent target, giving the central bank room to ease.

Economists expect that the central bank is unlikely to change its growth projections, considering the risks amid trade and geopolitical uncertainties. While India, one of the fastest-growing major economies, stands tall in a slowing global landscape, some believe there will be a downward revision of RBI's projection.

During the April policy review, Malhotra had revised India's growth for FY26 to 6.5 per cent, down from 6.7 per cent announced in the February meeting.

Malhotra is expected to address the media shortly, shedding light on economic growth, inflation, and the challenges ahead amid looming uncertainties.

Market expectations

The Indian benchmark indices, The BSE Sensex and the Nifty 50, are likely to kick off the day on a quiet but watchful note on June 6 amid mixed global market cues and ahead of the RBI policy today.

The trends on Gift Nifty also indicate a tepid start for the Indian benchmark index as it opens flat around 24,845, a discount of nearly 20 points from the Nifty futures’ previous close.

On June 5, the domestic equity market indices ended more than 0.5 per cent higher each, with the benchmark Nifty 50 closing above 24,700 level. While the Sensex gained 443.79 points to close at 81,442.04.

Global investors are watching closely, and with just hours to go for the announcement, markets remain on edge. Stay tuned—we’re tracking every development for you.