RBI MPC June Meeting Announcement On Friday: Here's What Leaders Expect

Across various sectors, expectations are mounting for a reduction in the repo rate, with many industry leaders hoping for a 25 basis point cut, from the current 6 per cent to 5.75 per cent

RBI governor Sanjay Malhotra

Source : YouTube/Reserve Bank of India

As the Reserve Bank of India’s Monetary Policy Committee (MPC) meeting is all set to conclude in Mumbai on Friday under the leadership of RBI governor Sanjay Malhotra, all eyes are on the upcoming policy announcement. Across various sectors, expectations are mounting for a reduction in the repo rate, with many industry leaders hoping for a 25 basis point cut, from the current 6 per cent to 5.75 per cent. Meanwhile, the State Bank of India (SBI) has suggested that the RBI might opt for a more aggressive move, possibly slashing the rate by 50 basis points to boost lending activity and address ongoing economic uncertainties.

A majority of business leaders across various industries view the current macroeconomic landscape, characterised by manageable inflation and consistent growth, as conducive for the central bank to consider a small rate cut. Lower borrowing costs, they believe, could particularly benefit sectors such as MSMEs, affordable housing, and healthcare, providing a boost to credit flow and overall economic activity.

Rate Cut To Inflict Affordable Financing 

Ramani Sastri, Chairman and MD, Sterling Developers, noted, "Affordable financing remains a key driver of demand in real estate, especially in the affordable and mid-income segments. As we await the upcoming RBI monetary policy announcement, the real estate sector is hopeful for a supportive policy measure with further rate cut as it would be highly encouraging for homebuyers and developers alike. With construction costs on the rise affecting capital flows, lower interest rates would also ease financing pressures for developers."

He added, "Overall, a further rate cut would strengthen market confidence, infuse much-needed liquidity, and also act as a strong signal of policy support for the real estate sector and the broader economy, thereby encouraging investments. With sustained demand and softening home loan interest rates, the sector’s growth momentum will definitely accelerate further, firmly establishing the real estate sector as a key driver of the nation's economic development."

Boost To Private Investment

Piyush Bothra, Co-Founder and CFO, Square Yards, said that with inflation withing control, the industry expects some bold moves from the central bank. "Despite India’s economy growing by a robust 7.4 per cent in the January–March 2025 quarter — exceeding expectations — the full-year growth for FY 2025 is has slowed to 6.5 per cent, marking the weakest pace since the pandemic. With inflation well within control, now hovering near 3 per cent, this is an opportune moment for the central bank to take some bold steps. A significant rate cut is not just desirable but necessary to revive the animal spirits and boost private investments, which have been quite sluggish. The real estate sector mirrors the broader economic trend, with growth moderating after a strong post-pandemic rebound. A meaningful reduction in the repo rate could be the catalyst the property market needs. To put it in perspective, even a 1 per cent reduction in interest rates can increase a homebuyer’s purchasing power by nearly 10 per cent, turning the dream of owning a house into reality for a larger population," he said.

Boost To Economic Growth

Laukik Bagwe, Fund Manager & Head – Fixed Income, ITI Mutual Fund, opined, “The RBI's proactive approach to monetary policy, combined with fiscal support measures such as tax cuts and increased capital expenditure, is expected to boost economic growth without exacerbating inflation. A front-loaded rate-cutting strategy, supplemented by liquidity and macro-prudential easing, should help narrow the negative output gap and sustain growth momentum. The upcoming monetary policy announcement is anticipated to continue this easing trend, supporting India's economic recovery and stability.”