The Reserve Bank of India’s June 2025 policy surprised markets with its boldness ~ slashing the repo rate by 50 basis points to 5.5 per cent, cutting the Cash Reserve Ratio (CRR) by a substantial 100 basis points, and pivoting its policy stance from accommodative to neutral. On the surface, these moves appear pro-growth and inflation-aware. But beneath them lies a more cautious message: the RBI is hedging its bets in an increasingly unpredictable global and domestic environment. The rate and CRR cuts signal the central bank’s confidence in inflation being under control. With the CPI inflation forecast revised downward to 3.7 per cent, and food prices showing moderation, the RBI has taken the opportunity to inject liquidity and lower borrowing costs.

The CRR cut alone is expected to release Rs 2.5 lakh crore into the banking system, easing funding constraints. Yet, the accompanying shift in........

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