Economic and Banking Affairs
Reserve Bank of India (RBI) Monetary Policy Committee Meeting
RBI MPC meeting commenced on 04.06.2025 under the leadership of Governor Sanjay Malhotra, marking the second policy meeting of FY 2025-26
Strong expectations for third consecutive rate cut of 25 basis points, which would reduce the repo rate from current 6% to 5.75%
State Bank of India research suggests possibility of 50 basis points cut to revive the credit cycle and support economic growth
Current inflation trends favor rate cuts with Consumer Price Index remaining below 4% target and showing sustained moderation
Policy announcement scheduled for 06.06.2025 at 10:00 AM, followed by detailed press conference at 12:00 PM
Monetary stance expected to shift from neutral to accommodative to support growth amid global economic uncertainties
Credit growth slowdown recorded at 9.8% compared to previous year’s 19.5%, indicating need for monetary stimulus
Inflation and Economic Projections
SBI forecasts inflation to remain below 3% in Q1 FY26 driven by significant correction in food prices
March 2025 CPI inflation hit 67-month low of 3.34% marking substantial improvement in price stability
Full year inflation projection estimated between 3.7% to 3.8% for FY26, well within RBI’s comfort zone
Core inflation excluding food and fuel showing stable trends supporting monetary easing decisions
Global Economic Outlook
OECD projects India’s GDP growth at 6.3% in 2025 and 6.4% in 2026, maintaining strong performance amid global slowdown
Key growth drivers identified as domestic demand, resilient services sector, manufacturing strength, and ongoing infrastructure investments
Global growth projected to slow from 3.3% in 2024 to 2.9% in both 2025 and 2026
China’s manufacturing activity contracted in May for first time in eight months, indicating impact of trade tensions
US economy growth expected to decline from 2.8% in 2024 to 1.6% in 2025
Sports Updates
IPL 2025 Final
Royal Challengers Bengaluru defeated Punjab Kings in the IPL 2025 Final held at Narendra Modi Stadium, Ahmedabad on 03.06.2025
RCB secured their maiden IPL title after 18 years of participation in the tournament
Match decided by narrow margin of 6 runs in a thrilling finale that showcased competitive cricket
Tournament was rescheduled due to earlier suspension, with final moved from originally planned 25.05.2025 to 03.06.2025
Narendra Modi Stadium hosted its third IPL final after previously hosting in 2022 and 2023
French Open 2025 Tennis Championships
Men’s Quarterfinals Results on 03.06.2025:
Lorenzo Musetti (Italy) defeated Frances Tiafoe (USA) 6-2, 4-6, 7-5, 6-2
Carlos Alcaraz (Spain) defeated Tommy Paul (USA) 6-0, 6-1, 6-4
Women’s Quarterfinals Results:
Aryna Sabalenka defeated Zheng Qinwen (China) 7-6(3), 6-3
Iga Swiatek (Poland) defeated Elina Svitolina (Ukraine) 6-1, 7-5
Tournament schedule continues with semifinals on 05.06.2025 and finals on 07.06.2025 (women’s) and 08.06.2025 (men’s)
Defending champions Carlos Alcaraz and Iga Swiatek both advancing toward potential title defenses
NBA Finals 2025
NBA Finals set to begin 05.06.2025 featuring Oklahoma City Thunder vs Indiana Pacers
Conference Finals concluded with Thunder defeating Minnesota Timberwolves 4-1 and Pacers overcoming New York Knicks 4-2
Games scheduled exclusively on ABC with first game tipping off at 8:30 ET on Thursday
Best-of-seven series format with potential conclusion by 22.06.2025 if all games needed
International Affairs
European Economic Developments
Eurozone inflation dropped below ECB target to 1.9% in May from 2.2% in April, supporting expectations for interest rate cuts
European Central Bank rate cut expected following seven previous cuts since June 2024
Services price growth moderation contributed to overall inflation decline in eurozone
Strong euro and mild economic growth providing support for accommodative monetary policy
South African Economic Data
South Africa’s Q1 2025 GDP growth recorded at modest 0.1% compared to 0.4% in Q4 2024
Agriculture sector emerged as star performer during first quarter, offsetting contractions in mining and manufacturing
Reserve Bank advocates for policy shift proposing lower inflation target of 3% to generate significant debt servicing savings
Potential savings estimated at 900 billion rand over next decade if inflation target lowered
Global Trade and Manufacturing
China’s factory activity contracted for first time in eight months, indicating impact of trade tensions with United States
Purchasing Managers Index fell to 48.3 in May, dropping below key 50-point expansion threshold
Export orders declining for second consecutive month, reflecting tariff impacts on manufacturing sector
Employment in manufacturing sector fell at sharpest pace since start of 2025
Policy and Regulatory Updates
Finance Bill 2025
Finance Bill 2025 introduced in Lok Sabha on 01.02.2025 to implement government’s financial proposals for FY 2025-26
Income tax provisions scheduled to come into effect from 01.04.2025 for assessment year 2025-26
Surcharge calculations specified for Union purposes as per First Schedule provisions
Implementation timeline varies for different sections with some requiring separate notification dates
Key Points for Competitive Exam Preparation
Banking Exam Focus Areas
Monetary Policy Tools: Understanding repo rate, SDF (Standing Deposit Facility), and their impact on liquidity management
Inflation Targeting: RBI’s mandate to maintain inflation around 4% with tolerance bands
Credit Growth Metrics: Analysis of year-on-year credit expansion patterns and economic implications
Global Economic Linkages: Impact of international developments on Indian monetary policy decisions
Current Affairs Memory Points
RBI Governor: Sanjay Malhotra leading current MPC deliberations
IPL 2025 Champions: Royal Challengers Bengaluru winning maiden title
OECD Growth Forecast: India projected to grow at 6.3% in 2025
Inflation Status: Below 3% expected in Q1 FY26 according to SBI research
Important Dates and Events
06.06.2025: RBI MPC policy announcement scheduled
05.06.2025: NBA Finals Game 1 between Thunder and Pacers
07-08.06.2025: French Open 2025 finals weekend
01.04.2025: Finance Act 2025 provisions becoming effective
