RBI Repo Rate: The RBI’s monetary policy meeting is scheduled for February 4–6, where interest rates are expected to be cut by 0.25%. This will make home loans cheaper.
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RBI Repo Rate: The Reserve Bank of India’s next monetary policy meeting is scheduled for February 4–6. A 0.25% cut in the repo rate is expected. The country’s economy has reached a crucial juncture. Economists believe a 0.25% cut in the repo rate is possible.
Striking a balance between controlling inflation and promoting growth is a major challenge for the RBI. The RBI is currently focusing on increasing liquidity in the market. Experts believe that the RBI may reduce the repo rate to 5.25% to boost consumer spending and investment.
Significant savings on home loans!
A reduction in the repo rate has a direct impact on home loans. If the Reserve Bank cuts the repo rate by 0.25% this time, a 20-year loan of Rs 50 lakh at an interest rate of 9% will result in a monthly savings of approximately Rs 800. The reduction in the repo rate will reduce the interest rate from 9% to 8.75%, resulting in a total interest savings of Rs 1.9 lakh. You can choose to reduce your EMI or keep it the same and reduce the loan term by 10-12 months. This will result in a savings of over Rs 4 lakh.
However, rating agency Crisil has stated in its report that given the rising inflation, the RBI may keep interest rates stable in its next monetary policy review meeting. Crisil stated, “Given the rising inflation, we expect the RBI to keep policy rates unchanged for the time being.”
How much has the repo rate been reduced in 2025?
The MPC has reduced the repo rate by 125 basis points since February 2025. The first reductions were 25 bps in February and April, followed by 50 bps in June, and 25 bps in December. Meanwhile, the RBI kept the repo rate unchanged in the August and October monetary policy reviews.
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