NewsBytes
    Hindi Tamil Telugu
    More
    In the news
    Mukesh Ambani
    WhatsApp
    Reliance Jio
    OPPO
    Vivo
    Sensex
    Bitcoin
    NewsBytes
    Hindi Tamil Telugu
    NewsBytes
    User Placeholder

    Hi,

    Logout


    India Business World Politics Sports Technology Entertainment Auto Lifestyle Inspirational Career Bengaluru Delhi Mumbai Visual Stories Find Cricket Statistics Phones Reviews Fitness Bands Reviews Speakers Reviews

    Download Android App

    Follow us on
    • Facebook
    • Twitter
    • Linkedin
     
    Home / News / Business News / RBI cuts repo rate by 25bps; loans/EMIs to get cheaper
    Business

    RBI cuts repo rate by 25bps; loans/EMIs to get cheaper

    RBI cuts repo rate by 25bps; loans/EMIs to get cheaper
    Written by Shiladitya Ray
    Feb 07, 2019, 01:06 pm 2 min read
    RBI cuts repo rate by 25bps; loans/EMIs to get cheaper

    Taking a major policy U-turn, the RBI's six-member Monetary Policy Committee (MPC) headed by newly-appointed Governor Shaktikanta Das lowered the repo rate by 25 basis points to 6.25%. The new repo rate was approved in a 4-2 vote, and marks the first reduction in repo rate by the RBI in 17 months. Loans and EMIs are likely to get cheaper. Here's more.

    How the repo rate cut is going to affect you

    Typically, when the RBI lowers the repo rate, commercial banks pass the benefit on to customers. If that is indeed the case this time, then auto, home, and other loans and EMIs are likely to get cheaper. Further, the RBI has also lowered the reverse repo rate to 6%, and marginal standing facility (MSF) rate and the bank rate currently stand at 6.5%.

    What is repo rate and reverse repo rate?

    For those unaware, the repo rate is the interest rate at which the RBI lends short-term funds to commercial banks. The reverse repo rate, as the name suggests, is the interest rate at which the RBI borrows short-term funds from commercial banks.

    The RBI monetary policy was also changed to 'neutral'

    The MPC meeting also marked the first monetary policy review by Shaktikanta Das, who had taken charge as RBI Governor in December 2018, following Urjit Patel's resignation. In the meeting, the RBI's monetary policy was also changed from the earlier 'calibrated tightening' to 'neutral'. The move comes against the expectations of economists, who had predicted a policy shift first and a rate cut later.

    Why the RBI opted to change its stance

    While announcing its decision to cut repo rate and change its monetary policy, the RBI cited a global slowdown in economic activity, and in some major emerging market economies. Further, the fact that global financial markets began 2019 on a calmer note after a turbulent December seems to have played a part in the RBI's bold decision to cut repo rate.

    Projections made by the RBI

    Turning to projections, the RBI also predicted GDP growth for 2019-20 to be 7.4% - in the range of 7.2%-7.4% in H1 and 7.5% in Q3. As far as inflation is concerned, the RBI said that inflation is projected at 2.4% in the January-March period, and 3.2%-3.4% in the April-September period.

    Share this timeline
    Facebook
    Whatsapp
    Twitter
    Linkedin
    Reserve Bank Of India (RBI)
    Repo Rate
    Shaktikanta Das
    Monetary Policy Committee

    Reserve Bank Of India (RBI)

    How to use ATMs with security features for chip-based cards India
    May need more currency as GDP size increasing: RBI official Business
    Lenders may bring out resolution plan for Jet Airways: SBI Jet Airways
    PM Narendra Modi's war-cry for 2019: This Chowkidaar won't stop Narendra Modi

    Repo Rate

    RBI leaves repo rate unchanged at 6.5% second-time in row India
    RBI likely to keep interest rate unchanged on December 5 India
    In a surprise move, RBI keeps policy rates unchanged Reserve Bank Of India (RBI)
    Know what does hiked RBI Repo Rate mean for you India

    Shaktikanta Das

    Operational independence of central banks important: IMF director Reserve Bank Of India (RBI)
    Sensex rises over 200 points, Nifty reclaims 10,800 mark Bharti Airtel
    Shaktikanta Das takes charge as new RBI Governor Reserve Bank Of India (RBI)
    Shaktikanta Das becomes the new RBI governor Reserve Bank Of India (RBI)

    Monetary Policy Committee

    RBI raises interest rate for first time in 4 years Reserve Bank Of India (RBI)
    RBI may soon introduce its own digital currency Reserve Bank Of India (RBI)
    Ahead of RBI policy meet, Sensex rises nearly 100 points Reserve Bank Of India (RBI)
    RBI keeps repo rate unchanged for third time at 6% India

    Love Business News?

    Subscribe to stay updated.

    Business Thumbnail
    Indian Premier League (IPL) Celebrity Hollywood Bollywood UEFA Champions League Tennis Football Smartphones Cryptocurrency Upcoming Movies Premier League Cricket News Latest automobiles Latest Cars Upcoming Cars Latest Bikes Upcoming Tablets
    About Us Privacy Policy Terms & Conditions Contact Us Ethical Conduct Grievance Redressal News News Archive Topics Archive Download DevBytes Find Cricket Statistics
    Follow us on
    Facebook Twitter Linkedin
    All rights reserved © NewsBytes 2023