RBI cuts interest rates by 0.25%, can be cheaper Loan
Home, auto and personal loans are expected to reduce EMI, the common people can get benefits
The decision was taken at a meeting of the Monetary Policy Committee (MPC), which has been scheduled for three days, on the interest rates of the Reserve Bank of India (RBI). RBI reduced the repo rate by 25 basis points to 6.5 to 6.25 percent. After this decision, the hope of declining bank loans and easing of EMI for the general public has increased.
Earlier, economists also expressed the RBI's interest rate cut by 0.25% on the MPC interest rate. It is worth mentioning that this is the first review meeting of the new governor of the country, Shashikikat Das. Das held the RBI on December 12.
Why Reduce Interest Rates
RBI has reduced the policy rates by 0.25% on account of Nirmi in inflation. Then the repo rate has been reduced from 6.50% to 6.25%. For the common people, the interest rates on loans from the bank are cheaper and the expectation of EMI decline has increased.
GDP growth in FY20 is expected to be 7.4 percent
Reserve Bank estimates the GDP for October-December to be 7.5 percent. On the other hand, GDP growth is forecast to be 7.4% in FY 2020. The growth forecast for April-September is expected to be between 7.2-7.4 percent.
Expectation of EMI decline
SBI has said in its research report that the RBI has cut the repo rate by 0.25 percent so that its people will also get the benefit. Home, auto and personal loan EMIs will be reduced.
Reduction in inflation
Bank of Baroda Chief Economist Samir Narang said that RBI may change its attitude. RBI can neutralize policy policies. During the October-December quarter, the inflation was below 2.6 percent for the Reserve Bank of 3.8 percent.
Previous rates
- Repo rate is 6.5 percent
- Reverse Repo Rate 6.25%
- CRR 4 percent
- SLR rate is 19.5 percent
- MSF 6.75 percent
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