Highlights of RBI’s 2nd Bi-monthly Monetary Policy of FY 2025-26

Current Context: The Reserve Bank of India (RBI) announced its 2nd Bi-monthly Monetary Policy of FY 2025-26 on June 6, 2025, with key decisions aimed at supporting economic growth while maintaining price stability.

Key Highlights:

• Repo Rate Cut: Reduced by 50 basis points to 5.50%, marking the third consecutive rate cut this year.
• Cash Reserve Ratio (CRR): Lowered by 100 basis points to 3%, implemented in four stages to enhance liquidity.
• GDP Growth Projection: Retained at 6.5% for FY 2025-26, supported by government capital expenditure and resilient consumption.
• Inflation Outlook: CPI inflation revised down to 3.7%, reflecting stable food prices and easing fuel costs.
• Policy Stance: Shifted from accommodative to neutral, signaling a balanced approach to monetary policy.

Question:

Q.1 As per RBI’s 2nd Bi-monthly Monetary Policy of FY 2025-26, What is the revised CPI inflation forecast for FY 2025-26?
a) 4.0%
b) 3.9%
c) 3.7%
d) 3.5%

Answer: c) RBI revised the Consumer Price Index (CPI) inflation estimate down to 3.7%, indicating cooling food and fuel prices.