- विज्ञापन -
The Reserve Bank of India (RBI) has cut the repo rate for the third time. After a three-day meeting of the Monetary Policy Committee (MPC), RBI Governor Sanjay Malhotra today announced the decisions taken in the meeting. The repo rate has been cut by 50 basis points (bps). With this cut, the repo rate has now come down to 5.50 percent. RBI had also cut the repo rate by 25 basis points each in February and April. In February 2025, interest rates were cut after a gap of about five years. At that time, the repo rate was reduced from 6.5% to 6.25%.
What is the repo rate? What will be the difference of the cut?
Reporate is the rate at which RBI lends to banks. When the repo rate is low, it becomes cheaper for banks to borrow and they are able to lend to customers at lower interest rates. With the cut in the repo rate, loans like home and car loans will become cheaper and the EMI of customers will come down. The RBI has cut the repo rate after the retail inflation rate remained below the RBI’s target of 4% for the third consecutive month.
Inflation rate forecast cut in 2026
Governor Sanjay Malhotra also said that the inflation forecast for FY26 has been reduced to 3.7% from the earlier 4%. He said that retail inflation has come down sharply and in April it came down to 3.16%, which is the lowest level in the last six years.
GDP growth forecast at 6.5%
The RBI has maintained the GDP growth forecast for the current fiscal at 6.5%. He also said that after cutting rates three times in a row, monetary policy now has very limited scope to support growth.
