Those who are waiting to reduce the burden of car or home loans (EMI), may get good news. According to media reports, an important decision may be taken in this regard in the Reserve Bank’s monetary policy meeting (RBI MPC Meeting) soon. It is believed that the Reserve Bank may move towards reducing the repo rate, which may reduce the monthly installments (EMI) of borrowers.

Why may the repo rate decrease?

Experts believe that the Reserve Bank may reduce the repo rate by another 0.25 percent on Friday as inflation is below the target of 4 percent. RBI has reduced the repo rate twice in the last six months to 6 percent. In such a situation, another big decision is expected in the upcoming meeting on June 6. RBI’s Monetary Policy Committee (MPC) is going to meet between June 4 and 6. Earlier, RBI had reduced the repo rate by 0.25 percent in February and April. It is estimated that the increase in US import duties will not cause a major shock to Indian GDP despite the global uncertainty, which may be helpful in favor of the decision to cut the repo rate. It remains to be seen what decision the six-member Monetary Policy Committee (MPC), headed by RBI Governor Sanjay Malhotra, takes in the coming days.

Expert Opinion:
Market experts are very optimistic about the RBI meeting. “With inflation under control and various measures taken by the RBI, the cash situation in the market is in a very good condition, due to which the MPC is likely to cut the repo rate by 0.25 percent on June 6,” said Madan Sabnavis, chief economist at Bank of Baroda. “CPI (Consumer Price Index) inflation is expected to remain at 4 per cent for most of the current financial year. The repo rate is expected to be cut by 0.25 per cent next week. This is followed by two more policy reviews, taking the total repo rate to 5.25 per cent at the end of the financial year,” said Aditi Nair, chief economist at rating agency ICRA.

If the RBI cuts the repo rate, it will undoubtedly be a source of relief for borrowers and is also expected to have a positive impact on the country’s economic momentum.