RBI cut in repo rate to 0.25%,loan EMI to come down

MUMBAI: Reserve Bank of India (RBI) Governor Sanjay Malhotra on Friday announced a reduction of 0.25 percent in the repo rate. The reduction in repo rate has a direct impact on the interest rates of loans and everything from home loans to car loans becomes cheaper.

The repo rate has been reduced by the RBI for the first time in the last five years. Earlier in May 2020, the repo rate was reduced to 4 percent.

The RBI MPC meeting was held from February 5 to February 7 to review the repo rate, the decision of which was announced by RBI Governor Sanjay Malhotra.

Malhotra said that the decisions of the MPC will affect all the citizens of the country. It is important for business, economists and all parties.He also told that inflation remains in line with the target and it can come down.

After a reduction of 0.25 percent in the repo, it has come down to 6.25 percent, which was earlier 6.50 percent.

RBI said that retail inflation is estimated to be at 4.8 percent in FY25, which may be 4.4 percent in the third quarter of the current financial year. Retail inflation may remain at 4.2 percent in FY26 due to normal monsoon. Inflation may be 4.5 percent in the first quarter of the next financial year, 4 percent in the second quarter, 3.8 percent in the third quarter and 4.2 percent in the fourth quarter.

RBI Governor said that GDP growth rate may be at 6.4 percent in FY25. GDP growth rate may be 6.7 percent in FY26. GDP growth rate may be 6.7 percent in the first quarter of the next financial year, 7 percent in the second quarter, 6.5 percent in the third quarter and 6.5 percent in the fourth quarter.

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