RBI Repo Rate Cut: The Reserve Bank of India (RBI) on Friday reduced the key policy rate repo by 0.25 per cent to 5.25 per cent, taking into account the macroeconomic situation and global conditions.
Along with this, the central bank also announced steps to support a ‘highly balanced’ economy to deal with the effects of US tariffs. RBI’s repo rate cut is expected to make housing, vehicle and commercial loans cheaper, but past experience shows that this cut has worked only for banks. Banks reduced interest rates on their deposits, but kept consumer loan rates the same as before.
Economic growth estimated at 7.3%
In view of the strong performance of the economy, RBI increased the economic growth forecast for the current financial year from 6.8 percent to 7.3 percent. Apart from this, the inflation rate estimate has been reduced from 2.6 percent to 2 percent. In this way, till now the repo rate has been reduced by a total of 1.25 percent in the year 2025.
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decision by consensus
RBI Governor Sanjay Malhotra said that the MPC has unanimously decided to reduce the repo rate by 0.25% to 5.25%. With this cut in repo rate, RBI has tried to put aside the fears related to the value of rupee going beyond 90 against the dollar.
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