In a decisive move aimed at invigorating economic momentum, the Reserve Bank of India (RBI) has cut the repo rate by 50 basis points, bringing it down to 5.5% with immediate effect. The announcement was made by RBI Governor Sanjay Malhotra following the three-day Monetary Policy Committee (MPC) meeting that concluded on June 6.

Addressing the media, Governor Malhotra said, “The MPC undertook a comprehensive assessment of the domestic and global economic outlook before arriving at the decision.” Along with the rate cut, the central bank has revised its policy stance from ‘accommodative’ to ‘neutral’, indicating a strategic recalibration in balancing inflation control with the need to support economic revival.

The 50 basis point cut — the steepest in recent quarters — is expected to push commercial banks to reduce lending rates, thereby making home loans, personal loans, and business credit cheaper for borrowers. The move is projected to bolster credit flow, uplift consumer sentiment, and reinforce the ongoing recovery across key sectors.

This is the second consecutive rate cut by the RBI. In April 2025, the central bank had reduced the repo rate by 25 basis points to 6%, while shifting its stance from ‘neutral’ to ‘accommodative’. The current rollback to 5.5% marks a continuation of that easing trend, now under a more cautious policy outlook.

Economists view this as a timely and strategic step. “This jumbo cut reflects the central bank’s proactive approach in addressing the evolving macroeconomic challenges and ensuring financial stability,” analysts noted. The broader economic context — including global slowdown concerns, geopolitical tensions, and subdued domestic demand — likely weighed into the MPC’s decision.

Experts believe the real estate and retail lending sectors will be the immediate beneficiaries of this decision. With home loan rates expected to decline further, realtors anticipate a surge in property bookings and buyer interest, especially in the affordable and mid-income segments.