The RBI on Friday cut repo rate by a higher-than-expected 50 basis points to prop up growth, which has slowed to a four-year low of 6.5 per cent in FY25.
Following the rate cut, the key policy rate eased to a three-year low of 5.5 per cent, providing relief to home, auto and corporate loans borrowers
This is the lowest repo rate in three years.
The repo rate—the rate at which banks borrow funds from the RBI—had last stood at 5.40 per cent on August 5, 2022.
After a detailed assessment of the evolving macroeconomic and financial development, as well as the economic outlook, the Monetary Policy Committee (MPC) decided to reduce the repo rate by 50 basis points, RBI Governor Sanjay Malhotra said.