Monetary Policy Meeting on June 6: SBI Expects a 50 Basis Point Repo Rate Cut

The Reserve Bank of India (RBI) is scheduled to hold its monetary policy meeting on June 6. According to a recent report by the State Bank of India (SBI), there is a possibility that the RBI might cut the repo rate by 50 basis points during this meeting. SBI anticipates that the total rate cut could reach up to 100 basis points by the end of this year.

In the past, the RBI reduced the repo rate by 25 basis points to inject liquidity into the system. Now, there are growing expectations that the central bank may opt for another rate cut as part of its monetary policy strategy. SBI suggests that these measures are being taken to support economic growth.

SBI Group Chief Economic Adviser Soumya Kanti Ghosh noted in the report that the banking system is currently experiencing a surplus liquidity situation. Following recent RBI decisions, financial institutions have reduced savings account interest rates to 2.70%. Additionally, fixed deposit rates have declined by 30 to 70 basis points since February 2025, leading to increased liquidity with banks. Banks are expected to utilize this surplus to boost lending activity.

SBI reiterated its view that a 50 basis point rate cut is likely in the upcoming June policy meeting, and projected a total reduction of 100 basis points by year-end. The report also stated that inflation levels remain within RBI’s mandated range.