Mumbai: In a significant move to boost economic activity, the Reserve Bank of India (RBI) has reduced interest rates by 50 basis points. This decision was announced by RBI Governor Sanjay Malhotra following the Monetary Policy Committee (MPC) meeting held this week.
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This marks a more aggressive rate cut compared to the previous revision, which saw a reduction of only 25 basis points.
Cheaper Loans Ahead: Relief for Borrowers
With this rate cut, loan interest rates are expected to come down, benefiting:
- Home loan borrowers
- Auto loan seekers
- Personal loan applicants
Banks are likely to pass on the rate cut to customers, making borrowing more affordable in the coming months.
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Why the RBI Cut Rates
The decision to reduce interest rates was taken to:
- Encourage consumer spending
- Boost economic growth
- Support credit flow in key sectors
The RBI believes that this move will further stabilize the economy and help businesses and households recover faster from financial stress.
What This Means for You
Lower interest rates mean:
- Reduced EMI on existing floating-rate loans
- More attractive terms for new loan seekers
- Potential rise in demand for housing and vehicles