New Delhi, Feb. 7 -- The Reserve Bank of India's Monetary Policy Committee (MPC) on Friday, February 8, decided unanimously to reduce the policy rate by 25 basis points to 6.25 per cent from 6.5 per cent. The central bank has decided to slash the key repo rate for the first time in nearly five years.

The RBI also lowered its growth forecast for the Indian economy to 6.7 per cent, citing the headwinds of geopolitical tensions, protectionist trade policies, volatility in international commodity prices, and uncertainties in the financial markets.

This interest rate cut will prove significant for borrowers who have taken out a home loan or personal loan, among other borrowings. This 25 basis point rate cut will reduce their EMI amounts, pro...