Repo Rate: Giving a big relief to millions of people across the country, the Reserve Bank of India (RBI) on Friday announced a cut in interest rates by 0.25%. This is the first repo rate cut in almost five years.
By reducing the repo rate by 0.25% (25 basis points), all loans including home loans and car loans will become cheaper, leading to relief in EMIs.
It is noteworthy that the RBI last increased the repo rate in June 2023, taking it to 6.5%. Since then, no change has been made in the repo rate.
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Repo Rate Reduced to 6.25%
For the first time after June 2023, the RBI has revised the repo rate, reducing it from 6.50% to 6.25%.
The meeting of the Monetary Policy Committee (MPC) headed by RBI Governor Sanjay Malhotra began on February 5 and ended today on February 7. After three days of discussion, the committee decided to cut the repo rate.
After the meeting, RBI Governor Sanjay Malhotra on Friday announced a cut in the repo rate by 0.25%. It is worth noting that the last time the RBI cut interest rates was in May 2020, when it cut the repo rate by 0.40% (40 basis points) to boost the economy during the COVID-19 crisis.
Sanjay Malhotra’s First MPC Meeting as RBI Governor
Sanjay Malhotra was appointed the new Governor of the Reserve Bank of India (RBI) after the resignation of Shaktikanta Das. This meeting of the Monetary Policy Committee (MPC) was his first meeting after assuming office.
Sanjay Malhotra is the 26th Governor of RBI and assumed office on December 11, 2024 for a three-year term.
It is noteworthy that Shaktikanta Das took over as RBI Governor on December 12, 2018 for a term of three years. In 2021, the government extended his term for three years. After serving as RBI Governor for six consecutive years, he resigned from his post on December 10, 2024.
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