New Delhi. The Reserve Bank of India has decided to cut the repo rate after a long time. RBI new Governor Sanjay Malhotra has announced a reduction of 0.25 per cent in the repo rate after her first monetary policy meeting. After this cut, the repo rate which was 6.50 percent so far will be reduced to 6.25 percent. For a long time, people were expecting a repo rate cut. Earlier, RBI reduced the repo rate in May 2020. Now after about five years, the repo rate has been reduced once again.
RBI Issues New Monetary Policy Statement
RBI Cuts Repo Rate by 25 BPS to 6.25%, its first cut in five years. Mpc maintains a neutral stance; GDP growth estimated at 6.7%. Markets react positively.
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Actually, the Reserve Bank gives loans to all banks of the country. The bank provides loans to the public only with this loan from RBI. The interest rate that RBI sets to give loans to banks is called repo rate. The repo rate directly affects those who have taken loans from banks. For example, the higher the repo rate, the bank will provide loans to the common people at the interest rate higher than that, if the repo rate will be low, then the bank will also keep the rate of interest for low loan.
In this way, the RBI has given relief to millions of people of the country who have taken home loans or any other loan from banks by reducing the repo rate. Now the loan interest rate will be reduced, which will cut EMI. There was no change in the repo rate by the Reserve Bank of India earlier in February 2023, since then there was no change in it. After the central government made the income of up to 12 lakh tax free in the budget, now this second major relief has been given to the people.
