The Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points, marking the first cut in nearly five years. This decision, aimed at boosting economic growth, comes after a long pause in rate changes.
RBI Governor Sanjay Malhotra, who took charge in December, stated that the move was driven by cooling inflation and concerns over global economic slowdown. With this rate cut, borrowers with home and small business loans on floating rates will see a reduction in their EMIs, making borrowing more affordable.
This policy change follows the recent tax relief announced in the 2025-26 Budget and is expected to boost consumer spending. Malhotra emphasized that the RBI will continue assessing the economic situation before making further changes.