Big Relief from Inflation: RBI Cuts Interest Rates Again, Home & Car Loans to Get Cheaper

Mumbai (The Uttam Hindu): Reserve Bank of India (RBI) Governor Sanjay Malhotra announced the bi-monthly monetary policy on Wednesday. RBI MPC has reduced the repo rate by 25 basis points to 6 percent, which was earlier 6.25 percent. This is the second consecutive time in 2025, when the central bank has cut the repo rate. Earlier in February, RBI MPC had reduced the repo rate by 25 basis points. The reduction in repo rate has a direct impact on the interest rates of all types of loans including home loans, car loans and personal loans. This decision will provide relief to the common man.

Apart from this, the central bank has changed the monetary policy stance from 'neutral' to 'accommodative'. Accommodative means that the central bank may continue to maintain a soft stance of monetary policy in the coming times. The RBI governor has lowered the GDP growth rate forecast for FY26 by 20 basis points to 6.5 percent.

According to the central bank, the GDP growth rate may be 6.5 percent in the first quarter of FY 26, 6.7 percent in the second quarter, 6.6 percent in the third quarter and 6.3 percent in the fourth quarter. According to the RBI governor, the inflation rate may remain at 4 percent in FY 26. It is estimated to be 3.6 percent in the first quarter of the current financial year, 3.9 percent in the second quarter, 3.8 percent in the third quarter and 4.4 percent in the fourth quarter.

Governor Malhotra said that currently inflation remains below the target. This is because of the fall in the prices of food products. He further said, "Next year the inflation rate may remain in line with the RBI's target of 4 percent." Governor Malhotra said that investment activities in the country are continuing to grow. There is an increase in manufacturing activities. He also said that there is an increase in urban consumption as well.