The RBI cuts the repo rate today by 25 basis points which is a good news for borrowers. EMIs are expected to go down for retail borrowers assuming that banks will pass the benefits to the borrowers. The Reserve Bank of India (RBI) review today in its bi-monthly monetary to cut the key policy rates by 25 basis points (bps). Now the repo rate stands at 6% down from 6.25% earlier and reserve repo rate at 5.75% as compared to 6% earlier.
This is second consecutive time RBI cuts the repo rate by 25 basis points in this year. RBI cuts the repo rate by 50 basis points in total this year now. The banks are likely to follow the policies and will pass the benefit. SBI has decided to link new interest rats on savings account and short term loans. Now all savings account balances of above 1 lakh and cash credit accounts, short term loans as well as overdrafts will be linked to the new repo rate from May 1, 2019.There are some other impacts on the country with this decision
1. GDP growth will likely to cut to 7.2 per cent from 7.4% this financial year.
2. CPI inflation target to move to 2.4% from 3%.
3. MPC’s Ghate, Viral Acharya voted for status quo