RBI Slashes Key Benchmark Rate to Revive Economy

New Delhi, Friday: In a bid to revive India's sluggish economy, the Reserve Bank of India (RBI) announced its first rate cut in almost five years on Friday. The move is expected to have a positive impact on home, auto and other loans.

The RBI's Monetary Policy Committee (MPC), headed by new Governor Sanjay Malhotra, slashed the repo rate by 25 basis points to 6.25 per cent. This reduction marks the first revision in over two-and-a-half years and is the first time the key benchmark rate has been cut since May 2020.

The decision is aimed at stimulating economic growth and providing monetary policy flexibility to support the government's economic revival plans. The RBI said that with inflation pressures easing, the focus now shifts towards promoting investment and supporting businesses.

Experts are optimistic about the impact of this move on various sectors such as real estate, automotive sales, and consumer spending, where higher interest rates have been a major hurdle for years. With this reduction in borrowing costs, it's likely to give a boost to these areas, thereby contributing to overall economic recovery.