RBI slashes key lending rate for 3rd consecutive time, brings it down to 5.5%
The Reserve Bank of India (RBI) on Friday reduced the key lending rate, or repo rate, by 50 basis points, bringing it down to 5.5% from 6%.
The decision was announced after the central bank’s Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, concluded its three-day meeting that began on June 4.
“After a detailed assessment of the evolving macroeconomic and financial developments and the economic outlook ahead, the MPC decided to reduce, which is rightly expected, under the Liquidity Adjustment Facility by 50 basis points to 5.5%. Consequently, the Standing Deposit Facility rate, which is the SDF rate, shall stand adjusted to 5.25%,” the RBI Governor said.
This is the third rate cut in a row, following a 25 basis point reduction in April.
Sanjay Malhotra also announced the change in stance by RBI. RBI changed its stance to neutral from its earlier stance of accomodative.
“After having reduced the policy repo rate by 100 basis points in quick succession since February 2025, the Monetary Policy Committee also felt that under the present circumstances, monetary policy is now left with very limited space to support growth. Hence, the MPC also decided to change the stance from accommodative to neutral,” said Malhotra.
The RBI Governor further said that from here onwards, the MPC will be carefully assessing the incoming data and the evolving outlook to chart out the future course of monetary policy in order to strike the right growth-inflation balance.