RBI Repo Rate News: Major Relief for Borrowers as Repo Rate Cut Again

The Reserve Bank of India (RBI) has once again announced key decisions following the Monetary Policy Committee meeting. The central bank has reduced the repo rate by 50 basis points, bringing it down to 5.50%. This marks the third consecutive rate cut in the past six months. Earlier, the repo rate was reduced by 25 basis points each in February and April, lowering it from 6.50% to 6.00%, and now to 5.50%.

This move comes as demand in the Indian economy shows signs of weakening—evident from slower credit growth, declining auto and real estate sales, and reduced household incomes. Meanwhile, inflation has also eased and has remained below 4% for the past three months.

With the latest rate cut, EMIs on home, car, and other loans are expected to fall, offering significant relief to borrowers. The RBI stated that this step is intended to boost investor confidence and strengthen domestic demand amid global economic slowdown.

The central bank has also lowered the Standing Deposit Facility (SDF) rate from 5.75% to 5.25% and the Marginal Standing Facility (MSF) rate from 6.25% to 5.75%. Additionally, the Cash Reserve Ratio (CRR) has been cut by 100 basis points—from 4% to 3%.

On inflation forecasts, RBI Governor Sanjay Malhotra mentioned that uncertainty in global markets prompted a revised inflation outlook for FY2026 to 3.7%, down from the earlier estimate of 4%.

Impact on EMI:
If you have a ₹50 lakh home loan over 30 years at a 9% interest rate, your monthly EMI would be around ₹40,231. After the 50 basis point repo rate cut, the EMI would reduce to approximately ₹38,446—a monthly saving of ₹1,785.

This decision also comes in the wake of recent global developments, including a 50% hike in U.S. tariffs on aluminum and steel—products that India exports in large quantities—posing potential challenges for the Indian economy.