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# Reserve Bank of India Cuts Repo Rate by 50 Basis Points to 5.50%, Accelerating 2025 Easing Cycle
- URL: https://www.theglobalbanker.com/rbi-cuts-repo-rate-50-basis-points-5-50-percent-june-2025/
- Published: 2025-06-06T09:22:00.000Z
- Updated: 2026-10-28T08:58:26.000Z
- Description: The Reserve Bank of India delivered a larger-than-usual 50 basis point cut on 6 June 2025, lowering the repo rate to 5.50% as inflation fell to around 3.2%, bringing total 2025 easing to 100bp.
- Author: TGB Editorial Team
- Tags: Central Banks, Asia-Pacific, #archive

The Reserve Bank of India cut its repo rate by 50 basis points to 5.50% at its June 2025 policy meeting. The larger cut, double the conventional 25-basis-point increment, brought the total easing conducted by the RBI in 2025 to 100 basis points by mid-year.

Consumer price inflation in India had fallen to approximately 3.2% ahead of the June decision, a level below the RBI's medium-term target of 4% and in the lower half of the central bank's 2-to-6% tolerance band. 

#### THE REPO RATE

The repo rate, the rate at which the RBI lends short-term funds to commercial banks, directly influences borrowing costs across the Indian financial system. 

#### CUT PAIRED WITH SHIFT TO NEUTRAL STANCE

The RBI framed its decision to front-load easing around subdued inflation and growth that remained lower than its aspirations.

Alongside the cut, which one of six MPC members opposed in favour of a 25-basis-point move, the committee shifted its stance from accommodative to neutral, while the RBI separately announced a 100-basis-point cut in the cash reserve ratio to 3%, in four tranches from September 2025\. The central bank's communication suggested that future decisions would remain data-dependent and sensitive to any re-emergence of inflationary pressure.