Year Ender 2025: When was the repo rate cut this year, how much relief did RBI give to the general public?

Year Ender 2025: Whenever the pace of the country’s economy slows down or inflation starts increasing, the Reserve Bank of India (RBI) takes steps to manage the situation. The Monetary Policy Committee (MPC) of the RBI meets every two months. In this meeting it is seen how much is the inflation in the country, what is the status of interest rates and how is the growth of GDP.

Keeping these things in mind, it is decided how much money (liquidity) is to be kept in the market and whether loans should be made cheap or expensive so that economic activities remain balanced and people are not put under too much pressure.

When and how much will the repo rate be reduced in 2025?

In the year 2025, RBI gave big relief to the people. A total of 125 basis points (bps) were cut throughout the year and the repo rate came down from 6.5% to 5.25%. The direct benefit of reduction in repo rate reaches the common people. Home loans and auto loans become cheaper, which reduces EMIs. By reducing EMI, people save more money in their pockets, their purchasing power increases, and the demand in the market increases.

• 25 basis point cut in February
• 25 basis point cut in April
• Relief of 50 basis points more than expected in June
• Another 25 basis cut in December

Other benefits of repo rate cut

At the same time, the cost of capital for companies reduces, which improves their cash flow. However, experts believe that reduction in interest rates can sometimes increase capital outflow, because when interest rates in other countries are high, foreign investors prefer to invest money there, which can further increase the weakness of the rupee.

What is the impact of RBI’s decision on the economy?

Dr. Aastha Ahuja, economist at Aryabhatta College, Delhi University, says that RBI policies have a direct impact on the direction of the stock market, changes in interest rates, availability of liquidity and investors’ sentiments, all three together decide the movement of the market. While the cash flow in the market increases due to reduction in repo rate, economic activity increases due to cheaper loans for companies and consumers. But it also impacts the balance of payments (BOP), inflation and the strength of the rupee, which has already weakened and gone above 90 against the dollar.

Also read: Inequality Report 2026: Only 1% people have 40% of the country’s wealth, the gap between rich and poor has deepened.

RBI’s goal behind cutting interest rates

According to Ahuja, stock market At present, while large cap stocks are performing well, mid-cap and small-cap sectors But pressure is being seen, the main reason for which is lack of demand in the market. In view of this entire situation, RBI has to run its monetary policy in a very balanced manner so that while controlling inflation, economic growth also gets momentum and the fall of rupee can also be stopped.