The Reserve Bank of India unexpectedly cut interest rates by 50 basis points, returning its stance to "neutral".

On June 6, the Reserve Bank of India (RBI) cut interest rates by 50 basis points more than expected on Friday, the third consecutive rate cut, as moderate inflation provides policymakers with room to support economic growth. Currently, the Reserve Bank of India (RBI) has cut interest rates by 100 basis points in 2025. Sachchidanand Shukla, chief economist at larsen & toubro, said the RBI took full advantage of the policy space provided by lower-than-expected inflation and weak economic growth and decisively implemented a 50 basis point rate cut. What is even more surprising is that it has changed its position back to "neutral". This must be one of the quickest changes in stance, as it only shifted to an "accommodative" stance at the last policy meeting in April. A return to a neutral stance now means that there is a possibility of both rate hikes and continued rate cuts in the future.