EMIs may ease as RBI cuts Repo rate by 25 basis points

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Mumbai: As per estimates, the Reserve Bank of India has reduced the Repo rate by 25 basis points (bps) to 5.75% from 6.00% earlier. The decision was announced after the end of the Monetary Policy Committee (MPC) meeting today. The decision is in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 % while supporting growth, RBI said.

After the rate cut, EMIs may ease as the banks are likely to transfer the benefit to the consumers by reducing interest rates.

“On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 5.75 per cent from 6.0 per cent with immediate effect. Consequently, the reverse repo rate under the LAF stands adjusted to 5.50 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.0 per cent. The MPC also decided to change the stance of monetary policy from neutral to accommodative. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth” RBI said in its policy statement.

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