This news can bring relief to common people. The RBI, which has been easing its monetary policies to support economic growth, is likely to reduce the repo rate by 0.50 percent from June till Diwali.
According to reports, the RBI’s next review meeting is scheduled between June 4 and 6. In this meeting, the Monetary Policy Committee may take a key decision that could bring good news for the public.
As per reports, there is already an agreement for a 0.25 percent cut before the RBI committee meets. Another reduction in the repo rate could come in the meeting scheduled for the first week of August or the last week of September.
Since Diwali falls on October 20 this year, RBI may give people a festive gift in the form of a rate cut.
Diwali gift from RBI
The RBI had reduced the repo rate by 25 basis points in February. Another 25 basis point cut came after the April meeting, giving major relief to people. Earlier, SBI had mentioned in its report that RBI could reduce the repo rate by up to 125 basis points during the 2025–26 financial year.
According to SBI’s report released in the first week of this month, the RBI may cut rates by about 75 basis points in the June and August meetings. A further 50 basis point reduction is also possible in the second half of the financial year 2026.
What is the repo rate?
The RBI holds a policy review every two months. Out of the six members in the RBI’s Monetary Policy Committee, three are from RBI, while the other three are appointed by the central government. Six meetings take place in a financial year.
In these meetings, the repo rate is set after reviewing market conditions to manage inflation and support the economy.
The repo rate is the rate at which RBI lends money to banks. When the repo rate is lowered, banks can get loans from RBI at cheaper rates. This benefits the public because bank loans become more affordable. As a result, EMIs on loans also decrease, making home and car loans cheaper.
