Reserve Bank of India (RBI) Governor Sanjay Malhotra, while announcing the monetary policy at 10 am on 7 February 2025, has reduced the repo rate by 0.25%, which has now increased to 6.25%. This is the first time in the last about five years when RBI has cut interest rates. citeturn0news10
Relief to home loan holders
Experts believe that this deduction will provide relief to those taking home loans. Banks will now reduce home loan EMI, which will give direct benefit to customers taking loans at floating rate.
Economic growth promoted
The meeting of RBI’s Monetary Policy Committee (MPC) started from 5 February and the decision was taken after three days of discussion. Lack of interest rates will make loans cheap, which will increase consumer expenses and encourage economic development. Earlier, on 1 February, Finance Minister Nirmala Sitharaman cut the income tax, causing tax for persons with annual income up to Rs 12 lakh.
Thus, these steps of both the government and the RBI together will help in promoting demand and development in the economy.
