RBI June 2025 Bulletin: Economy Resilient, Repo at 5.5%, CRR Cut
Why in the news
The State of the Economy article in RBI’s June 2025 Bulletin, prepared by RBI staff under Deputy Governor Poonam Gupta, points to steady domestic strength despite shaky global conditions and slower bank lending.
Key facts
- GDP growth FY25: reaffirmed at 6.5%, with Q4 showing momentum.
- Repo rate: down 100 bps from February to June 2025, now 5.5%.
- CRR: 100 bps phased reduction from 6 September 2025, releasing about ₹2.5 trillion to lower bank funding costs and lift credit to productive sectors.
- Money market: overnight trading hours to be extended from 1 July 2025.
- Net FDI inflows: $3.9 billion in April 2025.
| Rate transmission after cuts | Fresh | Outstanding |
|---|---|---|
| Lending rates | Down 6 bps | Down 17 bps |
| Term deposit rates | Down 27 bps | Down 1 bp |
Credit trends
- Scheduled commercial banks’ credit growth: 9.9% (30 May 2025) against 16.2% a year before.
- Agriculture and services slowed most.
- External Commercial Borrowings stayed healthy, with a slight dip since March 2025.
Concerns
- Trade policy uncertainty and rising geopolitical tension.
- These will shape the medium-term outlook, especially once the temporary tariff truce ends after July 2025.
Implications
- Easing plus targeted liquidity should help credit recovery.
- Watch external risks such as trade disruption.
- RBI’s liquidity operations may anchor inflation expectations while supporting growth.
Exam angle
- Repo 5.5%; CRR cut effective 6 September 2025.
- Bulletin article: State of the Economy.