RBI cuts repo rate by 25 base points to 6% from 6.25%
RBI cuts repo rate by 25 base points to 6% from 6.25%. RBI Cut in Repo Rate from 6.25 Percent to 6.00 Percent. 0.25% reduction in repo rate will be cheaper, your EMI, In the new financial year, the Reserve Bank of India’s first monetary policy review meeting has found great relief to the common man. Actually, 25 basis points have been deducted from the central bank’s repo rate. With this, the repo rate has now reduced from 6.25% to 6%. The Reserve Bank has reduced the GDP estimation by 0.2 percent for the year 2019-20.
The central bank had cut 0.25 basis points in repo rate after 18 months interval in February. For the second consecutive year, interest rate reduction can get great relief for borrowers in this election season. RBI’s repo rate was 6.25 per cent so far. At the same time, this was the second meeting of RBI in the leadership of Das, governor. Shantikant Das took over in December last year.
RBI cuts repo rate by 25 basis points to 6% from 6.25% pic.twitter.com/tnYzGGmFt1
– ANI (@ANI) April 4, 2019
Actually, the RBI decides on the interest rates keeping the retail inflation in mind. After several months of decline, retail inflation was marginally higher in February and it reached 2.57 per cent. This is a four month high level of retail inflation. However, inflation rate is still lower on an annual basis. This is the reason why there was pressure on the RBI to cut interest rates. Let me tell you that there has been a steady decline in inflation between July 2018 and January 2019.
How will you gain
With low repo rates, banks will be able to get affordable funding from RBI, hence the bank will now be able to offer other loans including home loans, car loan at lower interest rates. It will also benefit those who have a home loan or auto loan. In fact, after the repo rate cut, banks will be forced to reduce the interest rate on home or auto loans. Let us know that after the new rules of RBI, banks will have to give the benefit of repo rate reduction to the common people. In this case, if your home or auto loan is going on, its EMI will be reduced.
Deducted GDP estimates
For 2019-20, the Reserve Bank reduced the GDP estimate by 0.2 percent. At the monetary policy meeting of the Reserve Bank, the GDP estimate was kept at 7.2 percent. Earlier, the central bank had kept the GDP estimates at 7.4 percent. The governor of the Reserve Bank, Shikkantant Das said, the GDP estimate for 2019-20 has been kept at 7.2 percent. In the first half, the GDP estimate is 6.8 to 7.1 percent, while in the second half the figure is expected to be between 7.3 percent and 7.4 percent.
GDP projection for 2019-20 is kept at 7.2%, earlier projection was of 7.4%. pic.twitter.com/f2genxTP7n
– ANI (@ANI) April 4, 2019
Investor eyes on the meeting
Investors also looked at the results of the meeting of the Reserve Bank of India. This is the reason why the stock market volatility in early trading was seen. In the initial trading day of the week, the Sensex rose 58.63 points to open at 38,907.75, while the Nifty started trading at 11,660.20 with a rise of 16.25 points. Shortly after the market fell However, after the announcement of the RBI decision, the markets got cheerful in the stock market. At around 12.30, the Sensex rose nearly 40 points to reach level of 39,015.