In Modi 3.0’s Budget 2025, where the middle class was given a big relief and announced to make the earnings up to Rs 12 lakh tax free, now the Indian Reserve Bank is expected to take a big decision on the repo rate as well. . Actually, the meeting of RBI MPC has started on Wednesday and it is being brainstorming for the repo rate. However, whether your loan EMI will decrease or not, you will have to wait for a long time, because the results of the meeting are to be announced on Friday 7 February.
Repo Rate expected to cut
After the government, the Reserve Bank of India (RBI) can give great relief to the middle class. Many experts are expressing the guess that this time can see a change in stable policy rates. He says that the Reserve Bank can cut the loan interest rate to increase India consumption and liquidity. This cut can be of 25 to 50 basis points. However, the fall in the rupee remains a matter of concern for RBI.
So your EMI will decrease!
If the estimate of experts proves to be correct and the RBI cuts the repo rate by 25-50 basis points, then it will be a big relief for those taking loans and their loan EMI will be reduced. Please tell here that the direct connection of REPO Rate is to the bank taking loan. Due to its decrease, the EMI of the loan decreases and it increases due to the increase in it. Actually, the repo rate is the rate on which the central bank of a country lends money to commercial banks in the event of any shortage of money. The repo rate is used by monetary authorities to control inflation.
Why can the repo rate be reduced?
Now let’s talk about why the central bank can decide to cut the repo rate, so let us know that the retail inflation has been within 6 percent of the Reserve Bank in most of the year. For this reason, the central bank can also cut rates to promote the development affected by low consumption. The RBI holds a MPC meeting every two months and a six -member committee churns on all issues from repo rate, inflation to GDP.
First MPC meeting of new RBI Governor
The newly appointed Governor of the Reserve Bank Sanjay Malhotra is chaired by his first monetary policy committee (MPC) meeting and will announce the big decisions taken in it on Friday. If we look at the SBI research report, it states that the CPI -based inflation rate has come down to 4.5 per cent in the fourth quarter and it is expected to be an average of 4.8 per cent in the current financial year. In such a situation, the central bank can decide the repo rate cut.
When was the repo rate changed for the last time?
The Reserve Bank of India (RBI) has unchanged the repo rate at 6.5 percent since February 2023. The last time the RBI cut the rate at the time of Kovid (May 2020) and after that it was gradually increased to 6.5 percent. Since then the repo rate has not been reduced. Due to which bank loans have also become expensive.