There is a big good news in the economic world of the country. The Reserve Bank of India (RBI) has taken a big decision to cut the repo rate by half a percent i.e. 0.50% in its monetary policy committee meeting. This is the third consecutive time that RBI has reduced the repo rate. This clearly means that now you will get loans at a lower interest rate on all types of loans from home loans. This will give millions of people a great opportunity to strengthen their finances.
Now the new repo rate of the country has become 5.50%, which is half a percent less than before. After this decision, banks will start giving loans by reducing their interest rates, which will make it easier to buy a house, do business or make any big expenditure. This news has brought great relief especially to those people who wanted to take a loan for some reason, but were hesitant due to high interest rates.
India’s economic strength and fast growth
RBI Governor Sanjay Malhotra, while explaining about this decision, said that India’s economy is constantly moving towards strength. The pace of economic growth has slowed down a bit all over the world, but India’s growth rate is still the fastest. Domestic demand has strengthened India and there are many opportunities for investment within the country. This time is a golden opportunity for investors as the market still has full scope to grow.
Relief has been given twice before
RBI has cut the repo rate twice before this year in 2025. In the months of February and April, the bank had cut 0.25%-0.25%, which has now increased further with a big cut of 0.50%. This shows that RBI is trying its best to support the country’s economy and also affect the pocket of the common man.
What will be the benefit of reducing the repo rate?
When RBI reduces the repo rate, it means that banks can now borrow money from RBI at cheaper rates. The direct benefit of this is that banks cut the interest rates on their loans. This affects the common people and businessmen because they are able to take loans at lower interest. Especially home loans, car loans, and business loans become cheaper.
After this decision, new liquidity of about Rs 2.5 lakh crore is expected to come into the banking system. This will mean more money in the market, which will increase the credit flow and boost both consumption and investment in the economy. This will not only help in building a house or starting a new business, but will also increase employment opportunities and accelerate economic activities.
Stock market trend also affected
Indian stock markets opened slightly flat around the time of this decision of RBI. Buying was seen in IT and PSU bank sectors in the early hours of trading. At around 9.23 am, the Sensex was trading at 81,359 with a decline of about 82 points, while the Nifty also came down slightly. But investors are now eyeing this decision as to how it affects the market going forward.