Repo Rate Cut: The Reserve Bank is preparing to make the middle class happier. Interest rates may be cut further in the coming time. If this happens, taking a loan will become even cheaper. Also, interest rates will be reduced further. The Reserve Bank has recently reduced the repo rate by 25 basis points.
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New Delhi: Reserve Bank of India (RBI) can provide relief to the middle class by further reducing interest rates. The bank has recently reduced it by 25 basis points. According to a report, the Reserve Bank can reduce interest rates by another 50 basis points. According to the report, the bank plans to reduce the interest rates by a total of 75 basis points in the year 2025. If there is a reduction of 50 basis points, then not only will it become cheaper to get a loan but the EMI will also be reduced.
This report has been released by Bank of Baroda. The report states that RBI has started a phase of rate cuts. Further cuts are expected, but the timing is not yet decided. The report says that as soon as RBI starts a phase of rate cuts, it can be expected that there will be further cuts.
How much will the rate be cut this year?
According to the report, the Reserve Bank can cut the rate by 75 basis points in this calendar year. RBI has recently cut the repo rate by 25 basis points to 6.25 percent. The repo rate has been cut for the first time in 5 years. This decision to cut the rate was taken in the meeting of the Monetary Policy Committee (MPC).
When will the next rate cut happen?
The next meeting of the Reserve Bank’s MPC will be held in April. It is believed that some decision can be taken at that time regarding the reduction in the repo rate.
The report states that inflation is expected to be 4.4 per cent in the fourth quarter of FY25 and 4.5 per cent in the first quarter of FY26. However, inflation pressure is likely to reduce from the second quarter of FY26. This will create scope for further reduction in interest rates.
What is repo rate?
Repo rate is the rate at which the Reserve Bank lends money to other banks. If the Reserve Bank lends money at a lower rate, then banks also provide loans to customers at a lower rate. This includes home loans, car loans, personal loans etc. The middle class gets a big benefit from the reduction in repo rate, as it reduces the burden of EMI. On the other hand, liquidity also increases in the market.
