The Reserve Bank of India on Wednesday decided to maintain the repo rate at 6.5% for the fourth consecutive time this financial year. Despite global market fluctuations and the US Federal Reserve’s rate cut, RBI has decided to keep the rate unchanged. On the other hand, the central bank has projected the real GDP growth rate for FY 25 at 7.2%.
Repo rate is the interest rate at which the central bank of a country lends money to the commercial banks. And the changes in this rate influence the interest rates on loans and deposits offered by the banks.
A stable repo rate often translates to predictable EMI payments for borrowers.
As a result of RBI’s decision, EMIs will likely remain stable in the near term. Similarly home loans, personal and auto loans linked to the repo rate will also see no immediate changes in EMIs. The impact of the repo rate will remain minimal in the short term for the borrowers with fixed -rate loans.