Macro Wrap

RBI will announce outcome of the monetary policy today. It is likely to announce a third consecutive rate cut of 25 bps, taking advantage of the lower consumer price index that stood at 3.16 percent in April. RBI in its April 2025 policy had projected the FY26 growth at 6.5 percent and given the backdrop, it is expected to remain unchanged in the upcoming June 2025 policy.

It may revise its inflation projection downwards following a cooling off in inflation as overall headline inflation has stayed within RBI's medium-term target. Liquidity and other measures announcement will remain key monitorable.