All this will happen due to the repo rate cut..!

The Reserve bank of India's Monetary Policy Committee (MPC) has cut the interest rate by 25 basis points to 6.25%. The repo rate has been reduced for the first time in five years. This interest rate cut is expected to have various impacts.

Real Estate: Mainly, this interest rate cut will bring relief to home loan borrowers. Due to the reduction in the repo rate, banks are also likely to reduce the interest rate on their loans. Through this, the monthly installment (EMI) for home loans with floating interest rates will decrease.

New home Dream: This will provide relief to those who already have home loans and will also encourage more people to buy their own homes as the EMI burden will be reduced for those who want to buy new home loans. The low interest rate is also expected to help control the rise in house prices. This interest rate reduction is also expected to help control the rise in house prices.
Additional financial resources: This repo rate will reduce the interest rate on all loans, including car loans, bike loans, personal loans, and gold loans. This interest rate will be transferred to new loans over time, while it will apply to all loans with floating interest rates, so people will have additional financial resources in their hands. How..?

Increase consumption: Since the low interest rate helps borrowers reduce their monthly installments, they will have more funds in hand. As a result, they will be able to buy more other goods and services. This will also promote the growth of other industries. This will increase the overall consumption of the country.

Banks' decision: However, the impact of this rate cut will depend on the extent to which banks reduce their lending rates. The faster and more banks reduce their lending rates, the greater the benefits to the economy.

This rate cut reflects the Reserve Bank's efforts to promote economic growth, and the RBI's announcement comes after the budget announcements. The central bank's main task is to bring about a balance between controlling inflation and promoting economic growth.
For more interesting updates wa click and follow Indiaherald WhatsApp channel

Find out more:

RBI

Sowmiya Sriram

07/02/2025 06:39 PM