RBI Cuts Repo Rate After 5 Years: Your Loan EMI Will Reduce
The Reserve Bank of India (RBI) has reduced the repo rate by 0.25%, bringing it down to 6.25% after five years. This move is expected to lower loan EMIs and boost economic growth.
RBI Cuts Repo Rate After 5 Years: The Reserve Bank of India (RBI) has announced a 0.25% cut in the repo rate, bringing it down from 6.50% to 6.25%. This decision comes after five years, offering major relief to the middle class, especially borrowers with home loans, car loans, and personal loans.
RBI Cuts Repo Rate by 0.25% After Five Years
The last time RBI reduced the repo rate was in May 2020. However, over time, it was gradually increased to 6.50% to control inflation. The last repo rate hike was in February 2023. Now, after five years, the central bank has decided to lower the rate, aiming to boost economic growth and ease borrowing costs.
How Will This Repo Rate Cut Affect You?
Lower EMI on Loans – If you have a home loan, car loan, or personal loan, your EMI is likely to decrease as banks will pass on the benefits of the lower repo rate.
Cheaper New Loans – If you are planning to take a new loan, interest rates may be lower, making borrowing more affordable.
Boost for Real Estate and Auto Sector – With loans becoming cheaper, real estate and automobile sales may increase, benefiting these industries.
Why Did RBI Cut the Repo Rate?
RBI Governor Sanjay Malhotra explained that the global economy is facing challenges, including rising inflation, geopolitical tensions, and currency pressure on the Indian Rupee. The Federal Reserve (US Central Bank) has also cut interest rates multiple times, impacting global financial markets.
RBI is also working on improving security measures to tackle rising cyber fraud and financial crimes. Additionally, investors can now trade in government securities through SEBI-registered RBI platforms for better market accessibility.
What’s Next for Inflation and Economy?
According to RBI, inflation is expected to remain at 4.7% for this financial year, with a possibility of further decline. The repo rate cut is aimed at supporting economic growth while keeping inflation in check.
RBI’s repo rate cut is a significant move, providing relief to borrowers and boosting key sectors. If you have a loan, expect lower EMIs in the coming months. This decision also signals a positive outlook for the economy, encouraging investments and spending.
