Repo rate slashed by 25 BPS to 6.50%, lowest in over five-year, EMIs set to fall

Mumbai

Reserve Bank Governor Raghuram Rajan today cut the benchmark repo rate by 25 basis points. This is Dr Rajan’s first rate cut in over six months sent the repo rate to over five-year low of 6.50 per cent.

The reduction in repo rate – which is the rate at which Reserve Bank lends short-term funds to lenders – is likely to result in lower loan EMIs, bankers say. The government has been pitching for lower rates in a bid to boost demand in the economy.

SENSEX meanwhile plunged to 25,194; NIFTY was down to 7,673 soon after this announcement.

Rajan said bank interest rates have already come down by up to 0.5 per cent and you will see further cut in the future.