After 5 years, RBI reduced the repo rate, RBI Governor Sanjay Malhotra announced a 0.25% cut in the repo rate, loans will be cheaper, EMI will be reduced

Newspunjab

7 feb 2025

The Monetary Policy Committee (MPC) of RBI has cut the repo rate by 25 basis points (bps). Let us tell you that RBI has announced a cut after 5 years. After which the repo rate has been reduced by 25 basis points to 6.25%. This decision of RBI is expected to provide relief to the common people and the business sector.

The Monetary Policy Committee of the RBI has reduced the repo rate by 25 basis points (bps) to 6.25%. Earlier, the RBI had kept interest rates unchanged in 11 consecutive meetings. Earlier, the repo rate was reduced in May 2020 during the Covid-19 pandemic.

The decision was taken in the monetary policy meeting chaired by new RBI Governor Sanjay Malhotra. Due to the reduction in interest rates, home loans, car loans and business loans will become cheaper.

Repo rate is the rate at which banks borrow from RBI. If the repo rate decreases, banks can also provide loans to customers at cheaper interest rates. Due to this, the EMI of home loans, car loans and business loans is likely to decrease. However, it depends on the banks as to when and how much benefit they will give to the customers.

RBI Governor Sanjay Malhotra said that inflation has come down and this decline is expected to continue. At the same time, the RBI has increased India’s economic growth estimate for FY26 from 6.6% to 6.7%.