RBI reduces key repo rate by 25 basis points to 6.25%, first time in five years
PTC News Desk: The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) announced its decision to cut key repo rate by 25 basis points to 6.25% on Friday.
The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) announced its decision to cut key repo rate by 25 basis points to 6.25% on Friday. The key announcement was made by governor Sanjay Malhotra in first key address after taking over as the RBI Governor.
"The RBI’s decision to reduce the repo rate by 25 basis points to 6.25% supplements recent announcements in the budget aimed at boosting spending and spurring economic growth," said Boman Irani, President, CREDAI National.
The MPC had last reduced the repo rate in May 2020 and had kept the rate unchanged in the last 11 policy meetings.
As inflation stays above the medium-term target of 4%, the central bank faces a challenging task: controlling inflation, injecting liquidity into the banking system, and lowering repo rates in the upcoming quarter. Although the current rate cut may have a limited immediate effect, we expect a further reduction in the next MPC meeting to significantly boost overall demand, especially in the mid-income and affordable housing sectors. These actions collectively demonstrate a strong foundation for sustainable growth, instilling confidence in homebuyers, developers, and investors.
- PTC NEWS
