RBI Monetary Policy Meeting Live: RBI Cuts Repo Rate by 25 Bps – First Reduction in Nearly 5 Years
RBI MPC Meeting Live Updates: In a landmark decision, the Reserve Bank of India (RBI) cut the repo rate by 25 basis points (bps) to 6.25% during its Monetary Policy Committee (MPC) meeting held from February 5 to 7. This marks the first reduction in nearly five years, providing much-needed relief to borrowers and signaling a shift in the central bank’s stance.
The decision was announced today by the MPC, led by newly appointed RBI Governor Sanjay Malhotra. The move comes amid efforts to bolster economic growth while maintaining inflation control. Experts believe this rate cut could provide a boost to industries, homebuyers, and businesses reliant on loans.
Key Highlights of the RBI MPC Decision:
Repo Rate Cut: The central bank lowered the repo rate by 25 bps to 6.25%.
First Cut Since 2019: The last reduction in the repo rate was witnessed nearly five years ago.
New RBI Governor’s First Major Decision: Sanjay Malhotra, recently appointed as RBI Governor, presided over his first monetary policy review.
Economic Implications: The rate cut is expected to ease borrowing costs for businesses and consumers.
Inflation Considerations: The RBI has balanced growth concerns with inflationary pressures before making this decision.
Impact on the Economy
The rate cut is expected to have a direct impact on home loans, auto loans, and personal loans, leading to lower EMIs for borrowers. The banking sector may also witness increased liquidity, which could enhance lending activity and investment across sectors.
Economists suggest that this decision aligns with global trends where central banks are adopting a more accommodative stance to support economic growth. With inflation within the RBI’s target range, this move could stimulate demand and investment in key industries.
Market Reactions
Following the announcement, Indian stock markets showed a positive response, with banking and real estate stocks witnessing an uptick. Market analysts predict further easing measures if economic conditions demand additional support from the central bank.
Looking Ahead
The RBI has maintained a cautious outlook, stating that further policy actions will depend on inflation trends and global economic conditions. Governor Malhotra emphasized the importance of ensuring sustainable growth while keeping inflation under control.
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