RBI Repo Rate Cut: You can get relief from expensive EMI. The possibility of reduction in the interest rates of your home loan has increased. On Friday, February 7, 2025, the Reserve Bank of India will announce the decision taken in the Monetary Policy Committee and now there is every possibility that RBI can cut its policy rate i.e. repo rate by a quarter percent.
The possibility of reduction in interest rates has also increased because the government also wants to see this happening. Finance Minister Nirmala Sitharaman said in an interview to the Economic Times, RBI is free to take its decision and I cannot say anything to them. But RBI has also started believing that there is a need for more cash supply in the system and in recent times RBI has also taken steps in this direction.
The three-day meeting of the Monetary Policy Committee has started from February 5 under the chairmanship of RBI’s new Governor Sanjay Malhotra. And the decisions taken in the meeting are going to be announced by the new governor on Friday, February 7 and it is expected that the repo rate can be cut by a quarter percent. The repo rate can be reduced from the current level of 6.50 percent to 6.25 percent.
Shaktikanta Das, who was the governor before Sanjay Malhotra, did not cut the repo rate citing high inflation. But it is believed that Sanjay Malhotra can announce a cut in the repo rate in his policy announcement. Earlier in May 2020, the RBI had cut the repo rate by 40 basis points to bring it down to 4 percent. But after Russia’s attack on Ukraine, the inflation rate rose to 7.80 percent, after which to control inflation, between May 2022 and February 2023, the RBI increased the repo rate from 4 percent to 6.50 percent.
While presenting the budget on February 1, 2025, the Finance Minister announced tax exemption for those earning up to Rs 12 lakh annually in the new income tax regime. This will bring Rs 1 lakh crore in the hands of taxpayers, which will help in increasing consumption and demand. Now it is the turn of RBI to give a booster dose to the economy. It is believed that by giving relief from expensive EMIs and increasing cash in the market, common people can also get the gift of cheap loans from RBI.
