Repo Rate Cuts, Loans Could Get Cheaper

Reserve bank
Reserve bank

Mumbai : The repo rate cut by RBI teusday will make home loan cheaper. Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) today cut repo rate, or its key lending rate, by 25 basis points to 6 per cent – the lowest since November 2010. Falling inflation allowed the central bank to focus on boosting the economy which grew at the slowest pace in over two years in the January-March quarter. Banks could lower lending rates further, making loans cheaper. RBI chief Urjit Patel, addressing the media, said banks have scope for lowering lending rates further in some segments where transmission of lower rates “has not been faster”.
The RBI’s move was in line with market expectations. Forty of 56 economists polled by Reuters had expected the central bank to cut its repo rate by a quarter percentage point to 6 per cent. Four members of the Monetary Policy Committee voted to cut rates by 25 bps, while one voted for a 50 bps cut and one voted for leaving rates unchanged. The next meeting of the MPC is scheduled on October 3 and 4, 2017.