Mumbai, Feb. 8 -- The Reserve Bank of India's (RBI) monetary policy committee on Friday delivered a much-anticipated rate cut of 25 basis points, taking the policy repo rate to 6.25%.
This is the first rate cut in five years and comes amid slowing credit growth and easing inflation. The decision of the Monetary Policy Committee (MPC) is expected to lead to lower equated monthly instalments (EMIs) for retail borrowers by an equivalent amount, provided their borrowing rates are linked to an external benchmark, especially the repo. The repo rate is the interest rate at which commercial banks borrow from the RBI. Given that a majority of floating rate loans are linked to external benchmarks, the impact of the repo rate cut is expected to be fa...