In a surprise move, the Reserve Bank of India's Monetary Policy Committee voted unanimously to cut the repo rate by 50 basis points, bringing it down to 5.5%. This is the sharpest single-session rate cut since the pandemic era.
Governor Sanjay Malhotra cited easing inflation, a strong rupee, and sluggish credit growth as reasons for the aggressive cut. "We have room to support growth without compromising price stability," he stated.
Impact on Home Loans: For a Rs 50 lakh home loan with a 20-year tenure, the EMI is expected to fall by approximately Rs 1,700 per month — a significant relief for middle-class homebuyers.
Banks are expected to pass on the rate cut within the next 2-4 weeks. SBI, HDFC, and ICICI Bank have already announced they will review their MCLR and repo-linked lending rates.
Stock markets reacted positively, with the BSE Sensex gaining 800 points and real estate stocks surging 4-6% in early trade.
