The Reserve Bank of India (RBI) is poised to make a significant decision within four days. This decision will impact all borrowers of home loans and other types of loans. It is anticipated that the RBI may alter the repo rate on June 6.

Previously, the RBI changed the repo rate twice, which affected the interest rates of various loans, including home loans.

When the Repo Rate Changes

The Monetary Policy Committee (MPC) meeting of the Reserve Bank of India will take place between June 4 and 6. This meeting is held every two months. During this meeting, the RBI monitors the country’s inflation and accordingly determines the monetary policy. Changes to the repo rate are also made. Reducing the repo rate provides relief on the interest portion of loan EMIs. In the last six months, the RBI MPC meeting reduced the repo rate twice, each time by 0.25 percent. This resulted in a total reduction of 0.50 percent in the repo rate over six months. The current repo rate is 6 percent.

Will the Repo Rate Decrease Again?

There is a possibility that the repo rate will be reduced by another 0.25 percent in the MPC meeting scheduled for June 6. This is because the inflation rate has fallen below 4 percent, which is below the RBI’s target. Therefore, a third interest rate cut is expected. Additionally, export tariffs have increased due to the tariff war initiated by US President Donald Trump, which will have some impact on the Indian economy.

Overall, given the current situation, the RBI may reduce interest rates. This is crucial for the growth of the country’s economy. An increase in the flow of cash in the market will boost domestic demand, which is essential for the economy. A six-member committee, chaired by RBI Governor Sanjay Malhotra, will make a decision on this matter.