RBI cuts repo rate: The new governor of Reserve Bank of India, Sanjay Malhotra, has given a big gift to the country. The repo rate has been reduced especially keeping in mind the middle class families. The Reserve Bank of India has announced a reduction of 0.25 percent in its interest rates on Friday, February 7.
Common people will get big relief in EMI
Let us tell you that RBI has cut its interest rate i.e. repo rate after about five years. With the reduction of 0.25 percent i.e. 25 basis points in the repo rate, not only home loans but many loans including car loans will become cheaper. Common people will get great relief in EMI. Let us tell you that the Reserve Bank last increased the repo rate in June 2023, making it about 6.5 percent. Since June 2023, no change was made in the repo rate by the RBI. Related posts
It is believed that after the budget of the central government, the Reserve Bank of India has also given a big relief to the middle class. The middle class has been given a big relief by cutting the repo rate. This cut in the repo rate has been done by about 25 basis points. Due to which now the current repo rate has become 6.25 percent. This cut in the repo rate has been done after 5 years. Earlier, the Reserve Bank of India (RBI) had cut the repo rate in May 2020. However, after this the repo rate was gradually increased to 6.5 percent. The last repo rate increase was done in 2023.
The new Governor of the Reserve Bank of India, Sanjay Malhotra said that the meeting also discussed economy development. RBI has decided in the meeting that the repo rate is being reduced. Now the repo rate has come down from 6.50 to 6.25. After a 25 point cut in the repo rate, now the EMI of your loan will also be reduced.
The governor also said that in fact the global economy is going through challenges. Along with this, inflation is also increasing continuously at the global level. The rate has also been reduced by the Federal Reserve Bank. Along with this, geopolitical tension is also increasing continuously. Due to which it is affecting the economy around the world. The Indian rupee is currently under pressure. Therefore, there are many big challenges before the Reserve Bank.
The real GDP growth is estimated to be around 6.5 percent in this financial year 2025. It was 8.2 percent last year, this is expected to improve GDP in the coming years. At the same time, there has been improvement in the manufacturing sector as well. There has also been improvement in the mining sector. There has been a decline in PMI service in the last quarter. At the same time, demand is increasing continuously in rural areas.
RBI Governor Sanjay Malhotra emphasized that the repo rate is expected to be 4.7 percent inflation this financial year. At the same time, the inflation rate may come down further.
What is repo rate and what is the connection with your EMI
Actually the repo rate is the rate at which RBI lends money to other banks. If the Reserve Bank lends money to banks at a low interest rate, then the banks also provide loans to their customers at a low interest rate. This includes home loans, car loans and personal loans etc. The middle class benefits the most from the reduction in repo rate, because it reduces the burden of EMI on them.
Economic experts believe that the Reserve Bank has reduced the repo rate by 25 basis points to give relief to the general public. This will affect your loan EMI.
What is reverse repo rate?
Reverse repo rate is the interest rate at which RBI takes loans from other banks.
Connection between repo rate and EMI
Loans from banks like home loan, personal loan or car loan are linked to the repo rate. When banks get loans from RBI at low interest i.e. at low repo rate, then they can give cheaper loans to their customers.
How is EMI affected due to increase in repo rate?
Banks get expensive loans due to increase in repo rate. After this, they increase the interest rate of any type of loan given to their customers. Due to which the EMI of the customer's bank loan increases.
The repo rate has remained at 6.5% since February 2023. Since then, RBI had increased the repo rate by 25 basis points. After this, it was not changed.
Prakash Kumar Pandey
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