RBI Slashes Repo Rate by 50 bps to 5.5%; Loans Likely to Become Cheaper
Babushahi Network
Mumbai, June 6, 2025
In a major policy move aimed at boosting economic activity, the Reserve Bank of India (RBI) on Thursday announced a 50 basis points (bps) cut in the repo rate, bringing it down to 5.5%. The decision, taken by the Monetary Policy Committee (MPC), is expected to make loans cheaper for individuals and businesses.
RBI Governor Sanjay Malhotra stated,
“The MPC decided to reduce the policy Repo Rate under the liquidity adjustment facility by 50 basis points to 5.5%, with immediate effect. Accordingly, the Standing Deposit Facility (SDF) rate is revised to 5.25%, while the Marginal Standing Facility (MSF) rate and the Bank Rate now stand at 5.75%.”
This is the first rate cut by the RBI in over a year and signals a shift toward a more accommodative stance amid moderating inflation and sluggish private investment.
Experts believe the move will bring relief to borrowers across housing, automobile, and SME loan segments, as commercial banks are likely to reduce lending rates in the coming days.