India’s central bank Reserve Bank of India has allowed an easement for the citizen of the nation bringing down repo rate by 0.5 percent during its fourth bi-monthly monetary policy for the current fiscal. The benchmark repurchase (repo) rate which was 7.25 percent earlier went down to 6.75 percent after the reduction repo rate by RBI on Tuesday letting down the pressure on common man of India.

House Loans, Auto Loans Made Cheaper by RBI Slashing Repo Rate by 0.50 Percent

Indian economy analysts are claiming that this current repo rate is lowest in four-and-half-years which went down to 6.75 persons from 7.25 percent. RBI’s implementation of the biggest cut in repo rate over three years on Tuesday would make the home and corporate loans to cost less for the common man for their needs. Economists are extending their support to this decision of RBI as it would strengthen the Indian economy.

Raghuram Rajan, the governor of RBI vindicated regarding the unexpected reduction stating that consumer inflation was likely to be at 5.8 percent, below the 6 percent target for January, who earlier faced growing pressure from the government as also industry to reduce one of Asia’s highest borrowing costs. He said that their preliminary focus is to  bring down inflation to around 5 percent by March 2017 further adding that Reserve Bank of India will be vigilant for signs of monetary policy adaptations that are needed to stick to the “deflationary path”.

Raghuram Rajan has delayed the hike in interest rates in nine years of US Federal Reserve drawing a comfort for the citizens while this may place other emerging markets currencies under pressure. Although RBI has made its economic growth forecast earlier to 7.6 percent while the it lowered it to the current fiscal of 7.4 percent. “While the Reserve Bank’s stance will continue to be accommodative, the focus of monetary action for the near term will shift to working with the government to ensure that impediments to banks passing on the bulk of the cumulative 125 basis points cut in the policy rate are removed” said Raghuram Rajan.

RBI which was cut down the interest rates thrice earlier this year by 25 basis points each has lowered the repo rate on the back of them. One of the leading Public Sector Undertaking banks, Andhra Bank cut its benchmark lending rates by 0.25 percent in a few couple of minutes following RBI’s announcement of the reduction of repo rate. Many other public sector banks which are abiding RBI regulations are likely to follow suit

The announcement of the reduction of repo rate by RBI has made the BSE Sensex to recover from a 300 points down business report although it didn’t last longer leading its was to negative stats. Stay tuned with us for more trending alerts happening across the globe by bookmarking us in your web browser for easy navigation.