Reserve Bank of India’s (RBI) new Governor Sanjay Malhotra (Photo: PTI)
📉 What Just Happened?
The Reserve Bank of India (RBI) has cut the repo rate from 6.25% to 6.00% in April 2025. This means that banks can now borrow money from RBI at a lower cost.
RBI made this move to help boost the economy, especially after the recent US tariff hike, which can hurt exports and businesses in India.
🤔 What Is Repo Rate?
The repo rate is the interest rate at which RBI lends money to banks. When this rate is cut, banks can borrow money more cheaply.
✅ Lower repo rate = lower interest rates on loans
❌ Higher repo rate = higher EMIs and borrowing costs
🏠 How Does This Affect You?
This repo rate cut is good news for:
- 🏠 Home loan borrowers – EMIs may become cheaper
- 🚗 Car loans and personal loans – Interest rates could drop
- 📈 Business owners – Easier to get loans for growth
However, savings account interest might not increase much, so if you’re a saver, you may not earn extra interest.
📊 Repo Rate History (Recent)
| Date | Repo Rate |
|---|---|
| Dec 2022 | 6.50% |
| Feb 2025 | 6.25% |
| Apr 2025 | 6.00% |
📢 Why Did RBI Cut the Rate?
The RBI said that the economy is facing pressure due to new 26% US tariffs on Indian goods. To help Indian businesses and promote growth, RBI lowered the rate.
Also, RBI reduced the growth estimate for India to 6.5% (from 6.7%) and expects inflation to be 4%.
💬 Frequently Asked Questions
Q1. Will my EMI reduce now?
👉 If your loan is on a floating rate, yes! You may soon see a drop in EMI.
Q2. Should I take a loan now?
👉 It might be a good time, as interest rates could go down.
Q3. Does it affect FD rates?
👉 Possibly. Banks may reduce FD interest in the coming weeks.
Q4. How often does RBI change this rate?
👉 RBI reviews the repo rate every 2 months through the Monetary Policy Committee.
Q5. What is the repo rate?
👉 Repo rate is the rate at which RBI lends money to commercial banks.
Q6. What is the repo rate today?
👉 As of April 2025, the repo rate is 6.00%.
Q7. What is repo rate and reverse repo rate?
👉 Repo rate is what RBI charges banks for loans. Reverse repo rate is what RBI pays banks when it borrows money from them.
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✅ Final Thoughts
This repo rate cut shows that RBI is trying to support the economy during tough times. Whether you’re a borrower or a saver, it’s a good idea to stay updated and plan your money better.
💬 What do you think about this rate cut? Will it help the economy or not?
Tell us in the comments or share your thoughts on our Instagram or Twitter!
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