RBI reduced Repo Rate – Now EMIs of loans will be cheaper|
A big news from New Delhi – Reserve Bank of India (RBI) has cut 25 basis points in the repo rate. Now the new repo rate has become 6%. Its direct benefit is that bank loans can become cheaper, and your EMIs can be reduced.
What is Repo Rate?
Repo rate is the interest rate that RBI charges banks when banks take money from RBI. When the repo rate is low, then banks also start giving loans to their customers at a lower interest rate. Meaning, if you have taken a home loan, car loan or personal loan – then you are going to get some relief.
Repo rate cut for the second time this year
This is the second time in 2025 when RBI has reduced the repo rate. The first cut was in February – at that time the repo rate had come down to 6.25%.
What does the RBI Governor have to say?
RBI Governor Sanjay Malhotra said: “The Monetary Policy Committee has unanimously cut this repo rate. The global economy is under some tension, there are inflation risks, but we are prepared.”
He also said that the trade tensions going on around the world (like the US imposing tariffs on India’s exports) can have an impact on our exports. But RBI is confident in managing domestic growth.
Good News for Farmers and Markets
The Governor said:
The prospects of the agriculture sector are bright.
The manufacturing sector is reviving.
Urban consumption is increasing – people are making discretionary spending.
The balance sheets of banks and corporates also look healthy.
GDP Growth Estimate Reduced Slightly
RBI has slightly revised the GDP growth estimate. Now the real GDP growth estimate is 6.5% (0.2% less than before). But inflation is still under control, especially food prices have seen a sharp decline – which is a good thing.
Will this affect you?
If you have taken a loan or are planning to take one, then the meaning of repo rate cut is:
Lowest interest rates
Low monthly EMI
More spending power
So just get an update from your bank, and see if your loan can also be beneficial or not.
