RBI REPO RATE Expectations. of Reducation
RBI REPO RATE: Expectations of reduction in EMI of home, car and corporate loans increased, repo rate cut by 25 basis points
Rbi mpc meeting updates: RBI on Wednesday announced a reduction of 25 basis points in the key interest rate for the second consecutive time. This decision of the central bank has raised the hope of support for the economy affected by the reciprocal tariffs imposed by the US. Apart from the reduction in repo rate, what else has the RBI governor said? Let’s know.
Detail
The Reserve Bank of India (RBI) has announced a cut in the repo rate. The monetary policy committee of RBI has unanimously decided to cut the repo rate by 0.25 percent with immediate effect. RBI Governor Sanjay Malhotra said, ‘The members of the Monetary Policy Committee (MPC) voted to reduce the policy repo rate by 25 basis points to 6% with immediate effect.’ During this, the governor also pointed to new challenges for global development.
EMI of home, car and corporate loans may be reduced
RBI on Wednesday announced a cut of 25 basis points in the key interest rate for the second consecutive time. This decision of the central bank has raised hopes of support for the economy affected by the reciprocal tariffs imposed by the US. After the cut in interest rates, the key policy rate i.e. repo rate came down to 6 percent. This move brought relief to those taking housing, auto and corporate loans.
A cut of 25 basis points was also made in the month of February
In its previous policy in February, RBI had reduced the repo rate by 25 basis points to 6.25 percent. This rate came after the previous rate cut in May 2020. The last revision in rates took place in February 2023. When the policy rate was increased by 25 basis points to 6.5 percent.
What is repo rate?
The repo rate is the rate at which RBI lends to banks. Banks give loans to customers with this loan. A reduction in repo rate means that many types of loans from the bank, such as home loans, car loans will now become cheaper. However, for how long and how much the banks will cut the EMI, it depends on them. The Monetary Policy Committee of the Reserve Bank of India takes a decision on reducing, increasing or keeping the repo rate stable in its three-day meeting held at an interval of every two months.
GDP growth estimates cut after US tariff shock
RBI Governor Sanjay Malhotra said that the Monetary Policy Committee (MPC) has unanimously decided to reduce the policy rate by 25 basis points to 6.25 percent. Due to global uncertainties, RBI has reduced the GDP growth forecast from 6.7 percent to 6.5 percent. Last week, US President Donald Trump announced a hefty reciprocal duty of 26 percent on Indian imports, which will be effective from April 9. The RBI Governor has projected real GDP growth rate to be 6.5% in the financial year 2026. The RBI Governor said that due to policy and trade related uncertainties, growth estimates have been reduced by 20 basis points.
