look news india
The Reserve Bank of India (RBI) is preparing to provide relief to the middle class. According to reports, the RBI may cut the Repo rate at the Monetary Policy Committee (MPC) meeting to be held next month. This can reduce home loan, auto loan and personal loan interest rates, which will reduce the burden on the pockets of the common people.
Repo rate may be reduced by 0.25% in April
According to the Research Agency India Ratings and Research, the Reserve Bank of India may cut the repo rate by 0.25% in its next monetary policy review meeting to speed up economic growth.
Devendra Kumar Pant, the chief economist of India Ratings, said:
“We hope that the headline inflation will be reduced to 4.7% in FY 2024-25. Due to this, RBI can cut the monetary policy by up to 0.75% in the coming time.”
However, if the impact of the counter -charge imposed by the US is high, the RBI may consider a bigger rate deduction.
When will the next meeting of RBI be held?
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The next monetary policy committee (MPC) will meet between 7 to 9 April 2025.
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In this meeting, important decisions will be taken regarding the repo rate.
Rating agency report: How much can be cut in repo rate?
According to the rating agency, RBI may cut 0.25% in the April 2025 meeting.
| Time period | Possible repo rate deduction |
|---|---|
| February 2025 | 0.25% deduction (6.25%) |
| April 2025 | 0.25% deduction (6.00%) |
| By February 2026 | Total 0.75% deduction (5.5%) |
This may reduce the EMI of home loan, auto loan and other loans.
Why did RBI not cut last year?
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RBI did not make any changes in the repo rate for a long time due to high inflation (inflation).
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Between May 2022 to February 2023, RBI raised the repo rate by 2.50% to 6.5%.
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Now, there are signs of inflation decreasing, which may be possible to cut interest rates.
Repo rate cut was also cut in February 2025
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In February 2025, RBI cut the repo rate by 0.25% to 6.25%.
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India Ratings hopes that the retail inflation rate will fall below 4% for the first time in the March 2025 quarter.
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Due to this decline, RBI can cut further and up to 0.75%.
What will be the effect of repo rate cut?
Home loan and other loan interest rates will be low
Liquidity (liquidity) will increase in the market
Economic development will be promoted
Inflation will be kept under control