Repo Rate Cut: The results of the RBI MPC meeting which started on June 4 have come and once again the central bank has announced a 50 basis point cut in the repo rate…
Repo Rate Cut: The results of the Reserve Bank of India’s (RBI) MPC meeting have come and the central bank has once again given a big relief. In fact, RBI has cut the repo rate for the third consecutive time and reduced it by 50 basis points.
After this latest cut, the repo rate has now come down from 6 percent to 5.50%. Let us tell you that in the previous two MPC meetings also, interest rates were reduced by 25-25 basis points. There is good news for customers taking bank loans, because their EMI will be reduced even more now.
There will be relief in inflation as well
Sharing information about the bumper cut of 0.50% in Repo Rate, RBI Governor Sanjay Malhotra said that in the meeting, the SDF rate has been reduced from 5.75% to 5.25%, while the MSF rate has also been reduced from 6.25% to 5.75%. He also expressed the FY26 inflation estimate, saying that uncertainty remains in the global market and it has been kept at 3.7%. Earlier it was expressed as 4 percent. Along with this, the RBI Governor said that in the meeting it has also been decided to reduce the Cash Reserve Ratio (CRR) by 100 basis points from 4 percent to 3 percent.
No change in GDP estimate
RBI did not make any change in the GDP growth estimate for FY26, indicating that the central bank is confident about the direction of economic reform. The GDP estimate for the first quarter of FY26 is 6.5%. In the second quarter, the GDP estimate is 6.7%, in the third quarter it is 6.6% and in the fourth quarter it is estimated to be 6.3%.
Economic growth will get support
Reserve Bank Governor Sanjay Malhotra, while announcing the repo rate cut, described this move as supporting economic growth. He further said that India is continuously becoming a favorite destination for investment. India’s foreign exchange reserves are also increasing continuously and it has currently reached $ 691.5 billion.
Apart from this, he shared another important information and said that in view of the economic situation, RBI has changed the stance of its monetary policy strategy from Accommodative to Neutral. That is, now the Reserve Bank will not take any aggressive decision regarding reducing or increasing the repo rate.
Loan EMI decreases when the repo rate is low
Repo Rate is directly connected to the customers taking bank loans. Due to its decrease, the EMI of the loan decreases and due to its increase, it increases. Actually, the repo rate is the rate at which the central bank of a country lends money to commercial banks in case of any shortage of funds. The repo rate is used by monetary authorities to control inflation.
Repo Rate cut hat-trick
The RBI MPC meeting started on June 4 and its results were announced today on June 6. Even before the latest repo rate cut, relief was given in the last two meetings of this year. Earlier in the meeting held in February, the repo rate was reduced by 0.25 percent, after which it came down from 6.50% to 6.25%. So after this, in the first MPC meeting of FY26 held in April, it was once again reduced by 25 basis points to 6% and now the Reserve Bank has given a big gift to the loan taking customers by applying a hat-trick of Repo Rate Cut.
How much will the EMI reduce on a loan of Rs 50 lakh
Suppose you have taken a home loan of Rs 50 lakh from a bank for 30 years and in return you are paying 9% interest, then your monthly EMI will be Rs 40,231. On the other hand, after the RBI’s repo rate cut by 50 basis points, this EMI will reduce to Rs 38,446. That is, there will be a reduction of Rs 2000 in the monthly EMI.
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