RBI cuts key rate by 0.25%; to lower home, auto EMIs

Mumbai: The Reserve Bank of India (RBI) on Wednesday slashed benchmark lending rate by 0.25 per cent to 6 per cent citing reduction in upside risk to inflation, a move that will lower EMIs for home, auto and personal loans.

This is the first rate cut since October 2016 and the interest rate is now at 6-year low.

In line with record low retail inflation, the RBI Governor headed Monetary Policy Committee (MPC) cut policy repo rate by 25 basis points to 6 per cent and the reverse repo by similar proportion to 5.75 per cent.

The MPC has also decided to keep the policy stance neutral and to watch incoming data with a view to keeping headline inflation close to 4 per cent.

It stressed on urgent need to reinvigorate private investments, clear infrastructure bottlenecks and provide a major thrust to the Pradhan Mantri Awas Yojana.

RBI said it is working in close coordination with the government to resolve large stressed corporate borrowings and recapitalise public sector banks. (PTI)