The Reserve Bank of India (RBI) has announced a 25 basis point cut in the policy repo rate, bringing it down from 5.50% to 5.25%. The decision came after the Monetary Policy Committee (MPC) concluded its meeting today with a unanimous vote in favour of easing rates.
Why the Rate Was Cut
India is currently experiencing a rare mix of strong GDP growth and record-low inflation. This “Goldilocks” environment allowed the RBI to provide more monetary support to the economy. The central bank also revised the GDP outlook upward and expects inflation to stay on a lower trajectory.
Impact on Borrowers and Savers
Home loan and auto loan EMIs may fall, giving relief to borrowers as banks adjust lending rates.
However, fixed deposit rates may decline, which can impact investors relying on FD income.
Broader Economic Signal
The move signals the RBI’s intent to boost credit growth, support businesses, and maintain liquidity. With global uncertainties still present, the cut is aimed at keeping India’s growth momentum steady while managing risks.
Overall, today’s repo-rate cut reflects confidence in the Indian economy’s stability — and could stimulate more spending and investment in the coming months.
