Reserve Bank of India: Reserve Bank of India (RBI) has announced a reduction of 0.25 per cent in the repo rate. The RBI has reduced the repo rate to 6 per cent, which was 6.25 per cent earlier. The RBI has reduced the economic growth estimate for the current financial year 2025-26 from 6.7 per cent to 6.5 per cent. This decision of the Reserve Bank may make the loan interest rate cheaper in the coming days. This will also reduce EMI.
RBI Governor Sanjay Malhotra gave this information after the three-day review meeting of the first monetary policy committee (MPC) of the new FY 2025-26 on Wednesday. Lhotra said, ‘The Monetary Policy Committee (MPC) unanimously voted for the policy rate repo rate to reduce the repo rate to reduce the 25 basis points i.e. 0.25 per cent to 6 per cent with immediate effect.
He said that the Monetary Policy Committee has decided to reduce the repo rate from 0.25 per cent to six per cent with consensus. The Indian economy is moving forward according to the goals. Economic growth continues to improve. Malhotra said that the current financial year started with global uncertainty with the US fee, the RBI’s situation is watching.
What is monetary policy committee
RBI’s monetary policy committee consists of 6 members. Of these, 3 members belong to the Reserve Bank, while the remaining 3 members are appointed by the Central Government. The six -member committee has been tasked to set major policy interest rates in addition to making monetary policy to ensure price stability. These meetings are usually held in each two months.
What is repo rate
The repo rate is the policy interest rate on which the banks of India borrow money from the Reserve Bank of India (RBI). When RBI reduces this rate, banks can also give loans to customers at low interest rates. This means that people taking loans will have to pay less interest. If the repo rate is low then the interest rates on home loan, car loan and personal loan will be reduced. Along with this, it will also be easy for businessmen to take loans.
Currently MPC members
The Reserve Bank currently has six members. These include RBI Governor Sanjay Malhotra, Dr. Rajeev Ranjan, Executive Director of Central Bank, Reserve Bank Deputy Governor M Rajeshwar Rao, Dr. Nagesh Kumar, Director and Chief Executive, Industrial Development Institute, Saugata Bhattacharya of Industrial Development Studies, New Delhi, Economist Professor Ram Singh, Director, Delhi University, Delhi University.
It is worth mentioning that RBI had earlier reduced the repo rate by 0.25 per cent to 6.25 per cent in the monetary policy review in February this year. This was the first cut after May, 2020 and the first amendment after two and a half years. The monetary review meeting of the Reserve Bank usually takes place every two months. There will be a total of 6 meetings in this financial year. The Monetary Policy Committee consists of 6 members. Of these, 3 are of RBI, while the rest are appointed by the central government.
