RBI MPC Meet June 2025: Central bank cuts retail inflation projection to 3.7% from 4%

The Reserve Bank of India on Friday, June 6, cut its inflation projections for the current fiscal (2025-26) to 3.7%, from the earlier estimate of 4%, saying that it expects the core inflation to remain moderate on the back of easing in international commodity prices. The current projection of the sub-4% average retail inflation is the lowest in recent years.

Retail inflation in April moderated to a near 6-year low of 3.16%.

In April, the RBI had projected the retail inflation to average 4% in FY26.

For the June and September quarters of FY26, the RBI, assuming a normal monsoon, projected the CPI inflation to be at 2.9% and 3.4%, respectively. Similarly, for the December and March quarters, the inflation is estimated to be at 3.9% and 4.4%, respectively. As per the RBI, the outlook for inflation is expected to be benign across major constituents.

Further, the record production of wheat and higher production of key pluses in the Rabi crop season should ensure an adequate supply of major food items. In the coming future, the Kharif crop prospects also seem well on the back of likely above-normal monsoon and its early onset.

"Reflecting this, inflation expectations are showing a moderating trend, more so for the rural households. Most projections point towards continued moderation in the prices of key commodities, including crude oil," RBI Governor Malhotra said.

The central bank has been mandated to keep inflation at 4% with a band of (+/- 2%). The retail inflation remained below the 4% cap for three consecutive months until April 2025.