The Reserve Bank of India (RBI) has recently green-lit the long-awaited cheap loans for the middle class. The Reserve Bank of India (RBI) announced its decision to leave the repo rate unchanged at the end of its June monetary policy meeting. The repo rate remains unchanged at 5.25 percent. The three-day meeting of the Reserve Bank of India’s (RBI) Monetary Policy Committee, which began on Wednesday (June 3), concluded on Friday (June 5).
A question may arise in the minds of common people, what is this repo rate and what is its relationship with common people’s pockets? In simple words, repo rate is a type of interest rate at which RBI lends money to various commercial banks of the country. As a result, if the repo rate comes down, lower interest rates benefit commercial banks as well, and interest rates or EMIs on various loans like consumer home loans or car loans are likely to come down.
However, with interest rates unchanged at the June meeting, market experts believe there is no sign of a reduction in monthly loan installments for the public for now.
The Reserve Bank of India (RBI) has been cutting interest rates in the country’s market from early 2025 In February 2025, the country’s repo rate was 6.50 percent A total of 125 basis points or 1.25 percent interest rate cuts have been made in several stages keeping in view the economic situation of the country. The repo rate will eventually be reduced to 5.25 percent
Despite continued easing in 2025, the Reserve Bank has taken a stark contrast since February and April this year, with the RBI not cutting interest rates in three consecutive monetary policy meetings this June.
According to a group of economic experts, although the country’s inflation is under control at the moment, the Reserve Bank is worried about geopolitical instability internationally and the uncertainty of fuel prices in the global market. And that is why Governor Sanjay Malhotra has maintained a very cautious stance for now without any rush.