Home loans to get cheaper, RBI reduces interest rates

Shrugging off concerns over the depreciation of rupee, the RBI has cut interest rate by 25 basis points to 5.25 per cent in a bid to further bolster economic growth, which rose to a six-quarter high of 8.2 per cent in the second quarter of the current financial year.

The development is expected to make advances, including housing, auto and commercial loans cheaper.

Announcing the fifth bi-monthly



monetary policy for the current fiscal, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) has unanimously decided to cut the short-term lending rate or repo rate by 25 basis points to 5.25 per cent with a neutral stance.

The rate cut comes on the back of the consumer price index (CPI) based headline retail inflation ruling below the 2 per cent lower band mandated by the government for the last three months.