As the Reserve Bank of India (RBI) begins its crucial three-day Monetary Policy Committee (MPC) meeting today, markets, lenders, and borrowers alike are asking: will the central bank go for a further rate cut or maintain the status quo this time?

The policy decision, due on June 6, comes at a time when macroeconomic indicators present a mixed picture. Growth has been resilient. Inflation, at least on the surface, appears under control. Yet, the RBI must weigh not just numbers, but the undercurrents of risk, food price volatility, monsoon unpredictability, and global economic tremors.

Pramod Kathuria, founder and CEO of Easiloan, expects the central bank to remain on guard. “The subsequent RBI MPC meeting will probably maintain the repo rate status quo of 6.5%, reflecting continued growth vs inflation management. Despite the recent GDP growth numbers sustained and core inflation contained, threats to food inflation and uncertainty concerning the monsoons are likely to keep the central bank on its toes.”

Kathuria believes that while a hold signals caution, the markets are tilting toward optimism. “Rates hold would demonstrate the RBI's seriousness about managing inflation expectations and monitoring evolving macro indicators. But there is growing market expectation of a rate reduction—maybe 25 basis points—later in the year if inflation remains within the target range. That would be a much-needed respite to borrowers and aid consumption and credit demand across all segments, most importantly housing and MSMEs.”

He further stresses that beyond rate cuts, the RBI’s intent must show through in action—via liquidity, regulatory clarity, and tech-forward lending frameworks. “Along with rate action, transparency in management of liquidity, simplification of regulation, and upgrading of digital infrastructure will be required to facilitate credit flow and financial inclusion.”

Deepak Agrawal, CIO–debt, Kotak Mahindra AMC, points to a healthy macro backdrop: “The real GDP growth for Q4FY25 spurred to 7.40%, higher than 6.40% in the last quarter. The FY25 real GDP growth stood at 6.50%, in line with the government's estimate. The headline inflation for Apr’25 at 3.16% is the lowest since July 2019.”

Agrawal adds that liquidity conditions are favourable for a policy pivot. “The RBI has been infusing liquidity into the system since the beginning of 2025. The banking system liquidity is in surplus at ₹2.33 lakh crore as on 31 May 2025. Given this, there is an outside chance for MPC to widen the Repo–SDF spread from 25 bps to 50 bps, resulting in a 50-bps transmission with a 25 bp rate cut. However, we expect an additional 25 bps rate cut by October 2025.”

Adding to the expectation pile, a recent SBI Research report takes a bold stance: “We expect a 50-basis point rate cut in June 25 policy as a jumbo rate cut could act as a counterbalance to uncertainty. Liabilities are getting repriced faster in the current rate-easing cycle. Time to introduce an EBLR (External Benchmark Linked Rate) for the NBFC sector for a transparent and better rate transmission.”

So, will the RBI deliver the much-awaited cut, or remain cautious and be ready for future emergencies on a later date? The answer could alter the credit trajectory of the country and determine whether borrowers feel relief or restraint in the months ahead.