The Reserve Bank of India (RBI) reduced its key repo rate on Friday for the first time since May 2020, aiming to provide stimulus to the sluggish economy, which is projected to grow at its slowest pace in four years during the current fiscal year.

The repo rate influences interest rates on loans, including home loans. When the RBI lowers the repo rate, banks typically reduce their lending rates, making home loans cheaper.

In addition to the repo rate cut, the Standing Deposit Facility (SDF) and Marginal Standing Facility (MSF) rates have also been reduced by 25 bps to 6% and 6.5%, respectively. The bank rate has also been adjusted to 6.5%.

EMIs on home and vehicle loans will come down, making it easier for individuals to repay their debts. A lower repo rate makes borrowing cheaper for individuals and businesses, which can lead to increased spending and investment.

The Reserve Bank of India announced a 25 basis point cut in the repo rate, now at 6.25%, the first reduction in five years. The decision

The Reserve Bank of India (RBI) reduced its key repo rate on Friday for the first time since May 2020, aiming to provide stimulus to the sluggish economy, which is projected to grow at its slowest pace in four years during the current fiscal year.

The RBI's Monetary Policy Committee cut the repo rate by 25 bps for the first time in nearly five years, maintaining a neutral stance. Governor Sanjay Malhotra noted inflation aligns with targets amid concerns over economic growth and signs of inflation nearing 4 per cent.

The newly-appointed RBI Governor Sanjay Malhotra is anticipated to announce a 25 basis points repo rate cut to 6.25% on February 7. With the slowing economic growth and easing inflation, the Monetary Policy Committee may favor rate reduction to stimulate the economy,