April 09, 2025 – The Reserve Bank of India (RBI) has slashed its repo rate by 25 basis points, bringing it down to 6%. This marks the second cut in 2025, sparking interest among borrowers and economists alike. Here’s a breakdown of the RBI repo rate cut news, its implications, and how it affects you.
RBI Repo Rate Cut News: A Quick Update
The RBI announced the repo rate cut on April 9, 2025, during its Monetary Policy Committee (MPC) meeting. Governor Sanjay Malhotra highlighted a shift to an “accommodative” stance, signalling potential future cuts. This follows a February 2025 reduction from 6.5% to 6.25%, aimed at boosting economic growth amid global uncertainties.
- Why now? Inflation has eased to 3.6% in February, below the RBI’s 4% target.
- Big picture: The move counters global tariff pressures and supports domestic demand.
RBI Repo Rate Cut 2025: What’s Happening?
This year, the RBI has cut the repo rate twice—50 basis points in total. The latest reduction to 6% reflects a proactive approach to stimulate the economy.
- Date announced: April 9, 2025.
- New rate: 6%, effective immediately.
- Stance change: From “neutral” to “accommodative.”
Experts predict this could pave the way for cheaper loans and increased spending.
RBI Repo Rate Cut History: A Look Back
The repo rate, the rate at which RBI lends to banks, has seen ups and downs:
| Year | Key Action | Repo Rate |
| 2020-2022 | Held steady | 4% |
| 2023-2024 | Hiked over 11 meetings | 6.5% |
| Feb 2025 | First cut in 5 years | 6.25% |
| Apr 2025 | Second cut | 6% |
The last significant cut before 2025 was in May 2020, during the pandemic. This year’s reductions mark a shift after a long tightening phase.
RBI Repo Rate Cut Effective Date
The latest cut takes effect immediately—April 9, 2025. Banks are expected to adjust lending rates soon, though the reset for external benchmark-linked loans happens every three months, per RBI norms. Borrowers may see EMI relief by July 2025 if not sooner.
RBI Repo Rate Cut Circular: Official Word
The RBI’s official statement emphasizes growth support while keeping inflation in check. Key points from the circular:
- Inflation outlook: Projected at 4% for FY26.
- GDP forecast: Lowered to 6.5% from 6.7%.
- Focus: Balancing growth and stability.
The accommodative stance hints at flexibility for further cuts if conditions allow.
RBI Repo Rate Cut Policy Outlook
What’s next for RBI’s monetary policy? Analysts see this as a growth-driven move:
- Short-term: Lower borrowing costs to spur demand.
- Long-term: Monitor global volatility, like U.S. tariffs.
- Expert takes: “A well-timed boost,” says Anil Rego, fund manager at Right Horizons.
The RBI aims to keep inflation near 4% while cushioning the economy against external shocks.
RBI Repo Rate Cut Means: Explained Simply
So, what does a repo rate cut mean? It’s the rate at which banks borrow from the RBI. When it drops:
- Banks pay less to borrow.
- They can lower loan interest rates.
- You save on EMIs or get cheaper loans.
Think of it as a discount on borrowing that trickles down to consumers.
Repo Rate Cut Impact on Home Loan
Good news for homebuyers! The 25 bps cut could lower home loan rates significantly.
- Example: For a ₹50 lakh loan (20-year tenure):
- Old EMI at 8.25%: ₹42,603.
- New EMI at 8%: ~₹41,800 (savings of ₹800/month).
- Tip: Refinance if your rate hasn’t dropped yet.
Banks like SBI and Bank of India have already cut rates to 8%-8.25%. More reductions are expected.
Repo Rate Cut Impact on Personal Loan
Personal loans, often tied to external benchmarks, will also benefit:
- Rate drop: Expect a 0.25% reduction soon.
- Savings: On a ₹5 lakh loan (5 years):
- Old EMI at 10%: ₹10,624.
- New EMI at 9.75%: ₹10,550 (savings of ₹74/month).
- Action: Check with your lender for updates.
This cut makes big-ticket purchases more affordable.
Final Thoughts
The repo rate cut 2025 is a win for borrowers. With home and personal loan EMIs set to dip, it’s a chance to save or invest. Keep an eye on your bank’s response—some pass on benefits faster than others. As global pressures loom, the RBI’s move shows confidence in India’s economic resilience. What’s your take on this? Let us know!
FAQs
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What is the repo rate cut by RBI?
The repo rate from RBI is currently 6%, which is lower than the previous one, 6.5%.
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Will RBI reduce the repo rate in 2025?
The first meeting of the Monetary Policy Committee (MPC) in 2025 to 2026 saw its 54th meeting unanimously reducing the policy repo rate by 25 basis points to 6 per cent effective immediately.
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What is the benefit of a repo rate cut?
A reduction in the repo rate translates to lower loan interest rates, reduced EMIs, and higher savings for the borrower. Cheaper borrowing enhances consumption and economic growth.
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What is a 25 bps rate cut?
The repo rate has been revised by 25 basis points so low as from 6%, and thus, the external pricing benchmark linkage (EBLR) is expected to be trimmed down equally.
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What is the repo rate today?
The repo rate today is 6%.
