The Reserve Bank of India has cut the repo rate by 25 basis points to 6.0%, marking the second consecutive rate cut as the central bank prioritises supporting economic growth amid moderating inflation. The six-member Monetary Policy Committee voted 5-1 in favour of the reduction.
RBI Governor Shaktikanta Das, in his policy statement, indicated that the easing cycle is not over, noting that inflation has remained within the central bank’s 2-6% target band for seven consecutive months.
Markets responded positively, with the Sensex gaining 450 points and the 10-year government bond yield dropping to 6.85%, its lowest level in 18 months.
Impact on borrowers
Home loan EMIs are expected to decrease by Rs 15-20 per lakh per month following the rate cut. Banks have already begun transmitting the reduction, with State Bank of India announcing a 25 basis point cut in its benchmark lending rate effective immediately.
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