News Update (June 6):

RBI Cuts Interest Rates, Stock Market Rallies

• Rate Cut: The Reserve Bank of India (RBI) has reduced the repo rate from 6% to 5.5% — the lowest level since August 2022.

• Lower Than Expected: The new rate is below the market’s average expectation of 5.75%.

• Third Consecutive Cut: This is the third rate cut in a row since February.

• Reason: RBI Governor Sanjay Malhotra cited inflation and economic slowdown as the key reasons.

• RRR Also Reduced: The Cash Reserve Ratio (CRR) has been reduced from 4% to 3%.

• Stock Market Surge: After an initial dip, the Sensex rose by 0.87% and the Nifty Bank by 0.95%.

Experts consider this move significant in enhancing liquidity in the economy.