RBI Monetary Policy Committee meeting begins today:No expectation of interest rate cut as repo rate currently stands at 5.25%

The Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) meeting is starting today, i.e., from June 3. This meeting will continue till June 5 and all decisions taken in it will be announced on the same day. According to experts, there is little hope of an interest rate cut in this meeting. Earlier, in the meeting held in April too, there was no cut in the repo rate. 1.25% cut in four times in 2025 Why does the Reserve Bank increase and decrease the repo rate? Any central bank has a powerful tool in the form of policy rate to fight inflation. When inflation is very high, the central bank tries to reduce money flow in the economy by increasing the policy rate. If the policy rate is higher, the loans that banks receive from the central bank will be expensive. In turn, banks make loans expensive for their customers. This reduces money flow in the economy. When money flow decreases, demand falls and inflation comes down. Similarly, when the economy goes through a bad phase, there is a need to increase money flow for recovery. In such cases, the central bank reduces the policy rate. This makes loans from the central bank to banks cheaper and customers also get loans at cheaper rates. RBI meeting happens every two months The Monetary Policy Committee has 6 members. Out of these, 3 are from RBI, while the rest are appointed by the central government. RBI’s meeting happens every two months. In recent days, the Reserve Bank had released the schedule of Monetary Policy Committee meetings for the financial year 2026-27. A total of 6 meetings are to be held in this financial year, this is the second meeting of this fiscal year. The first meeting was held in April.