The Reserve Bank of India’s MPC member noted in the minutes of Monetary Policy Committee Meeting, June 4 to 6, 2025 that the 50-basis-point rate cut in this cycle seems very reasonable and highly desirable. Moreover, the current situation warrants a front-loaded rate cut. However, a relatively big interest rate cut would mean that the interest rate differential with the U.S. Fed would reduce to lowest levels in recent time, the minutes noted. This, ceteris paribus, can put pressure on the rupee, especially vis-à-vis the USD. However, given the robust fundamentals of Indian economy including comfortable current account situation, any pressure on INR is likely to be confined to short run, according to MPC member Prof. Ram Singh. Further, a pick in growth can more than offset the adverse effect of reduced interest rate differentials, if any, he added.