There is good news for borrowers and people planning to take loans. The Reserve Bank of India (RBI) has cut the repo rate by 50 basis points in its monetary policy review. The repo rate has been reduced from 6% to 5.5%. This was announced by Reserve Bank of India (RBI) Governor Sanjay Malhotra. This is the third consecutive cut in the policy rate. This directly affects the EMI of home loans, as home loan rates are linked to the repo rate. Earlier, in the monetary policy reviews of February and April, the RBI had cut the repo rate by 25 basis points each.
Earlier, there was no cut in the repo rate for five years. Lower interest rates not only have a positive impact on the sale of houses and cars but also increase growth by increasing liquidity in the entire economy. RBI has also reduced the Cash Reserve Ratio (CRR) by 100 basis points to 3 percent. Earlier, this rate was 4 percent. Similarly, RBI has also reduced the SDF to 5.25 percent. The bank rate has also been reduced to 5.15 percent. This will also give relief to banks to borrow from RBI.