The Reserve Bank of India (RBI) reduced its key repo rate on Friday for the first time since May 2020, aiming to provide stimulus to the sluggish economy, which is projected to grow at its slowest pace in four years during the current fiscal year.

The RBI's Monetary Policy Committee, led by new Governor Sanjay Malhotra, cut the repo rate by 25 basis points to 6.25%, maintaining a neutral stance. This change follows eleven meetings with an unchanged rate.

EMIs on home and vehicle loans will come down, making it easier for individuals to repay their debts. A lower repo rate makes borrowing cheaper for individuals and businesses, which can lead to increased spending and investment.

The repo rate, set by the RBI, influences borrowing costs for banks. A higher repo rate raises FD interest rates, attracting deposits, while a lower rate reduces FD returns by making borrowing cheaper.

The former revenue secretary in the Ministry of Finance, Malhotra is expected to announce the cuts to lower interest rates for economy’s growth which is expected to reach a four year low.

The RBI’s decision to cut the repo rate by 25 basis points—from 6.50% to 6.25%—in February 2025 is expected to provide a significant boost to homebuyers.

The Reserve Bank of India announced a 25 basis point cut in the repo rate, now at 6.25%, the first reduction in five years. The decision

The repo rate cut is expected to lower interest rates on loans, particularly benefiting homebuyers and other borrowers.

The Reserve Bank of India (RBI) reduced its key repo rate on Friday for the first time since May 2020, aiming to provide stimulus to the sluggish economy, which is projected to grow at its slowest pace in four years during the current fiscal year.

The RBI's Monetary Policy Committee cut the repo rate by 25 bps for the first time in nearly five years, maintaining a neutral stance. Governor Sanjay Malhotra noted inflation aligns with targets amid concerns over economic growth and signs of inflation nearing 4 per cent.