RBI MPC major relief to people in loan EMI, interest rates cut for the second time in a row

Country's banking regulator Reserve Bank of India has given relief to crores of people of the country in loan EMI. RBI's MPC has cut the repo rate by 0.25 percent for the second time in a row. After which the repo rate has come down from 6.25 percent to 6 percent. This decision from RBI has come at a time when people are surprised and troubled by US President Donald Trump's tariff. After this decision, the possibility of inflation and recession in the world has increased. In view of the possibility of the global economy going into recession, this decision of RBI is being considered much better. While the members of the RBI MPC recommended a cut of 0.25 percent, after which the decision to cut the repo rate was taken.

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Reserve Bank of India has given relief to crores of people

The special thing is that RBI Governor Sanjay Malhotra has cut the RBI policy rate for the second time in a row. In the policy meeting of February also, interest rates were cut by 0.25 percent. This cut was seen after about 5 years i.e. 56 months. After this cut, common people are expected to get a big relief.

RBI policy rate for the second time in a row

The cost of retail loans of the banking sector along with home loans, car loans will come down. The real sector can benefit greatly from this. The demand for houses can increase in this sector which has been facing recession for the last few months.

Monetary Policy Statement by Shri Sanjay Malhotra, RBI Governor- April 09, 2025, 10 am https://t.co/0OCWkvfgc3

— ReserveBankOfIndia (@RBI) April 9, 2025

Change in stance

He said that with this the MPC has decided to change its stance from neutral to liberal. This means that in the coming time, either the status quo can remain in the matter of policy rate, or it will be cut if needed. Repo is the interest rate at which commercial banks borrow from the central bank to meet their immediate needs. Also Read: Wall Street Falls Again as US Slaps 104% Tariff on China

 RBI uses this rate to control inflation. Reducing the repo rate means that the monthly installment (EMI) on various loans including home, vehicle is expected to decrease.

RBI cuts growth

On the other hand, while announcing the decision of the policy meeting, the RBI Governor said that RBI has reduced the estimate of GDP growth rate for the financial year 2025-26 to 6.5 percent. Which was earlier 6.70 percent. The RBI Governor has also changed the estimate of all four quarters. According to the Governor, the country's GDP is estimated to be 6.5 percent in the first quarter. At the same time, this growth can be 6.7 percent in the second quarter.

RBI Governor Sanjay Malhotra say

While in the third quarter this figure is estimated to be 6.6 percent and in the fourth quarter the country's growth rate is estimated to be the lowest at 6.3 percent.

What is the inflation forecast

On the other hand, the inflation forecast has also been changed by the RBI MPC. According to the data, the inflation rate in the country can be 4 percent in the financial year 2026, which was more than this earlier. If seen on a quarterly basis, the inflation rate can be less than 4 percent in the first three quarters of the financial year. Although if we look at the data, the inflation can be 3.6 percent in the first quarter, 3.9 percent in the second quarter, 3.8 percent in the third quarter. At the same time, the inflation rate has been estimated to be 4.4 percent in the fourth quarter.

Summary

After which the repo rate has come down to 6 percent. After this decision, there is a possibility of reduction in interest rates of all retail loans along with home loans, car loans.