RBI Slashes Repo Rate to 6% Amid Global Uncertainty, Signals Cheaper Loans Ahead

The RBI cut the repo rate to 6%, citing global economic uncertainty and easing inflation. This second consecutive rate cut aims to reduce loan EMIs, boost credit flow, and support growth. Industry leaders praised the move, highlighting positive implications for real estate, MSMEs, and overall consumer sentiment.

In a significant move to support economic growth, the Reserve Bank of India (RBI) has cut the repo rate by 25 basis points, bringing it down to 6%. This marks the second consecutive rate reduction in 2025, highlighting the central bank’s shift to a more accommodative stance in response to mounting global economic challenges. RBI Governor Sanjay Malhotra stated that the new fiscal year has commenced under a cloud of global uncertainty, citing trade tensions and recent US tariff hikes as key concerns.

The monetary easing comes at a time when inflation is easing and crude oil prices are falling. The RBI revised its inflation forecast for FY26 down to 4%, while also lowering the real GDP growth estimate to 6.5%, slightly below the earlier projection of 6.7%. According to the Governor, a sharper-than-expected drop in food prices provided some relief on the inflation front, though global factors continue to pose risks.

Industry leaders welcomed the rate cut, saying it will lower borrowing costs, stimulate demand in housing and MSME sectors, and enhance liquidity. Real estate developers noted that more affordable home loans could spur residential sales, particularly in the mid-income and affordable housing segments.

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This policy shift is aimed at making credit more accessible and boosting economic momentum amidst geopolitical and trade-related turbulence. With two back-to-back rate cuts now in place, financial markets and borrowers alike are expected to benefit from reduced lending rates and cheaper EMIs, potentially ushering in a more vibrant investment environment in the coming quarters.