Chennai: Days after the income tax cut, there is one more good news for the middle class as their EMI burden is going to come down after the RBI MPC on Friday slashed interest rates by 25 basis points (bps). For new borrowers also, home loan, auto loan and personal loan are going to get cheaper soon.
After the latest cut, the repo rate (the interest rate at which the RBI gives loan to banks) stands at 6.25 per cent, down from 6.50 per cent earlier.
This is the first interest rate cut by the RBI since Covid times (May 2020). Between May 2020 and April 2022, the RBI kept the repo rate unchanged at 4 per cent.
It then started hiking the policy rates since April 2022 and gradually raised to 6.5 per cent till February 2023 before keeping it unchanged for two years until now.
With the RBI lowering the key policy rates, it is likely that banks will follow suit.