Breaking: Home & Car Loan just Got Cheaper, RBI Reduces Repo Rate

Today, the Reserve Bank of India (RBI) released its second bi-monthly monetary policy of Financial Year 2025-26. The Governor of the Central Bank of India, Sanjay Malhotra-led Monetary Policy Committee (MPC), has decided to reduce its repo rate by 50 basis points (bps) to 5.50%. Earlier, the repo rate was 6.00%.

This is the third consecutive repo rate reduction of the RBI (Reserve Bank of India).

The Governor of the Central Bank of India, Sanjay Malhotra, said in his monetary policy speech, the Monetary Policy Committee (MPC) have also thought to amend its policy approach to ‘Neutral’ from earlier, ‘Accommodative’.

Moreover, he said MPC has also decided to reduce its Cash Reserve Ratio (CRR) by 100 basis points (bps) to 3%. Earlier, the CRR was 4%.

The Reserve Bank of India (RBI) cut down its repo rate by 25 bps in its April monetary policy meeting and also changed its policy approach from ‘neutral’ to ‘accommodative’.

The RBI has kept the GDP growth forecast for the financial year 2025–26 at 6.5%. It expects growth to be 6.5% in the first quarter, 6.7% in Q2FY26, 6.6% in Q3FY26, and 6.3% in Q4FY26.

At the same time, the RBI lowered its inflation forecast (CPI) for the year to 3.7%, down from the earlier estimate of 4%. For Q1FY26, CPI inflation is now expected to be 2.9% instead of 3.6%, Q2FY26 is 3.4% instead of 3.9%, Q3FY26 slightly increased to 3.8% from 3.9%, and Q4FY26 remains unchanged at 4.4%.