RBI cuts repo rate by 25 basis points to 6.25%

Mumbai: RBI Cuts Repo Rate by 25 Basis Points

In a move aimed at boosting economic growth, the six-member Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Friday announced a 25 basis point reduction in the repo rate. The current repo rate stands at 6.25%. This marks the first time in five years that the RBI has decided to cut the repo rate, with the last reduction occurring in May 2020.

The repo rate is the interest rate at which commercial banks borrow money from the RBI. Reducing this rate is expected to benefit people by lowering interest rates on various loans, including home loans, auto loans, and corporate loans.

For the FY2024-25, the RBI has projected India's real GDP growth at 7.2%, while other economic institutions predict a 6.4% growth rate. In the recent Union Budget for FY26, Finance Minister Nirmala Sitharaman announced a 100% tax cut for income slabs up to ₹12 lakh. This decision was widely appreciated, as many people had been criticising the government for high tax rates. Both these decisions by the RBI and the Finance Ministry have provided a sigh of relief for the people.

Disclaimer: This article is for informational purposes only and should not be considered financial advice.