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Mumbai, India (Maharashtra): In order to determine the policy interest rates, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) will start its three-day meeting in Mumbai on Wednesday.

RBI Governor Sanjay Malhotra is serving as the meeting’s chairman. On Friday, June 6, the meeting’s conclusion will be made public.

The country’s inflation rate has been gradually dropping at the time of this policy meeting. The Ministry of Statistics and Programme Implementation published official statistics showing that retail inflation in India decreased from 3.34 percent in March to 3.16 percent in April.

Since inflation is now below 4%, the MPC is anticipated to consider this when determining its policy position.

The RBI is expected to announce a 50 basis point (bps) reduction in the repo rate during this policy, according a report by SBI. The bank thinks that at this point, a significant rate drop might enhance overall economic development and help revitalize the lending cycle.

According to the estimate, the overall rate drop for the easing cycle may reach 100 basis points. “We expect a 50-basis point rate cut in June’25 policy as a large rate cut could reinvigorate a credit cycle,” the SBI said in its research.

The RBI announced a 25 basis point reduction in the repo rate, from 6.25 percent to 6 percent, during the most recent MPC meeting, which took place on April 7, 8, and 9.

The governor then said, “After a detailed assessment of the evolving macroeconomic and financial conditions and outlook, the MPC voted unanimously to reduce the policy repo rate by 25 basis points to 6 per cent with immediate effect.”

This action in April came after the repo rate was lowered by 25 basis points from 6.5% to 6.25% in February.

Markets and analysts are eagerly watching whether the central bank would adopt a more aggressive stance this time with a 50 basis point drop, given that it has already implemented two straight rate cuts and inflation is continuing to decline.