Rbi repo rate: The Reserve Bank of India (RBI) on Friday has reduced the major policy rate repo to 5.5 percent for the purpose of speeding up domestic economy amid softening of inflation. The central bank has taken this step amidst the ongoing uncertainty globally.
While presenting the bilateral monetary policy review, RBI Governor Sanjay Malhotra said that the 6 -member committee of the Monetary Policy Committee (MPC) has decided to cut the repo rate by 0.50 percent.
Repo is the interest rate on which commercial banks take loans from the central bank to meet their immediate needs. RBI uses this rate to keep inflation under control. Reduction of repo rate means that the monthly installment (EMI) can decrease on various loans including houses.
It is noteworthy that RBI had earlier cut the repo rate by 0.25–0.25 percent in the monetary policy review of February and April this year.
The MPC consists of 3 members of RBI and 3 external members appointed by the government. With this, RBI has retained the economic growth rate estimate for 2025–26 at 6.5 percent. In the current financial year, the estimate of retail inflation has been reduced from 4 percent to 3.7.
Edited by: Nrapendra Gupta
