Festive Cheer Ahead: RBI Expected to Reduce Repo Rate, EMIs May Drop

New Delhi (The Uttam Hindu): The Reserve Bank of India (RBI) is preparing to give a big relief to the common man. According to reports, the Reserve Bank can cut the repo rate by up to 0.75% in the coming months. This will directly benefit people's EMI - that is, home loans, car loans and personal loans can become cheaper!

RBI may give a gift before Diwali…Repo rate may decrease by 0.75%, your EMI may become cheaper! : The next meeting of the Monetary Policy Committee (MPC) of RBI will be held on 4-6 June. An initial cut of 0.25% is expected in this meeting. After this, the next two meetings are likely on 5-7 August and 29 September to 1 October. In these meetings too, the repo rate may be further cut by 0.25% to 0.50% respectively. If everything goes as expected, the repo rate may come down to 5.25% before Diwali, which will be much lower than the current 6%.

Repo rate is the rate at which RBI lends money to banks. When this rate decreases, banks also give loans to their customers at cheaper rates. This affects your pocket – EMI decreases, spending capacity increases.

Home loans and car loans will be cheaper

Industry will get cheap funds, which will increase both investment and employment

Increase in consumption, which will support economic growth

Sunny Agarwal, Deputy Vice President of SBI Securities, said that inflation is under control, monsoon is expected to be normal and GDP growth is stable - all these factors are giving RBI an opportunity to cut rates. At the same time, Nomura has estimated that the repo rate can come down to 5% by the end of 2025 - that is, there is a possibility of a cut of up to 1%.

There will be a total of 6 monetary policy meetings of RBI in the financial year 2025-26. MPC consists of 6 members, out of which 3 are from RBI and 3 are appointed by the government. This meeting is held every two months, and every time it is expected that the general public will get relief according to the economic situation.

If RBI cuts the repo rate by a total of 0.75% in the next few months, it can prove to be a big relief for everyone from the common man to the business sector. Buying a house before Diwali, buying a car or starting a new business – everything can become easier and cheaper.