RBI likely to cut repo rate by 50 bps in June and August: SBI Research

According to a report by SBI Research, the Reserve Bank of India (RBI) may lower interest rates by 50 basis points in June and August as inflation reaches a multi-year low and expectations stay low. According to the research, as worries about an increasingly unstable economic climate develop, overall rate cuts may surpass 100 basis points.

According to the report, GDP growth is expected to be 6.3% in the fiscal year 2026 (FY26), with a downward bias. "We anticipate rate decreases of 50 basis points in June and August due to this month's multi-year low inflation and benign inflation projections moving forward. Given the more uncertain growth scenario, we think the total rate cuts could now exceed 100 basis points.

According to the paper, "we project GDP growth in FY26 at 6.3% with a downward bias." On April 9, the RBI's Monetary Policy Committee (MPC) declared that the repo rate would be lowered by 25 basis points (bps), from 6.25 percent to 6 percent.