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2025 Rate Cuts Explained: Why did RBI and Fed reduce the rates? , Money Live , 2025 Rate Cuts Explained: Why did the RBI and Fed reduce rates?

Admin — Thu, 01 Jan 2026 08:24:24 +0000

2025 proved to be a turning point for the global economy. As inflationary pressure subsided, central banks had an opportunity to support growth.

In this video we understand why RBI and US Federal Reserve cut interest rates in 2025 and what effect it had on the economy. Taking advantage of low inflation, RBI in India cut the repo rate by a total of 125 basis points, which made borrowing cheaper and boosted consumption.

Inflation fell to a record low 0.25% in October 2025, giving space for aggressive monetary easing. At the same time, due to labor market slowdown in America, the Federal Reserve started rate cuts again in the second half of 2025. The impact of these policies was clearly visible on loans, investments and overall economic activity.

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Year Ender 2025: When and how much did RBI cut the repo rate, how did it give big relief to the public?

Admin — Thu, 11 Dec 2025 09:18:14 +0000

Year Ender 2025: Whenever the country’s economic growth slows down or inflation starts getting out of control, then the Reserve Bank of India (RBI) takes steps to keep the economy stable. The Monetary Policy Committee (MPC) of RBI meets every two months to review the situation of inflation, interest rates and GDP, on the basis of which it is decided how much cash flow should be in the market and how to balance economic activities by reducing or increasing the cost of loans.

When and how much rate cut in 2025?

In the year 2025, giving great relief to the people, RBI reduced the repo rate by a total of 125 basis points from 6.5% to 5.25%. It was cut by 25 basis points in February, then by 25 basis points in April, twice as much as expected in June i.e. 50 basis points and again by 25 basis points in December. The general public directly benefits from the reduction in repo rates – home and car loans become cheaper, EMIs reduce and the purchasing power of consumers increases, thereby increasing demand in the market.

At the same time, the cost of capital for companies reduces, which improves their cash flow. However, experts believe that reduction in interest rates can sometimes increase capital outflow, because when interest rates in other countries are high, foreign investors prefer to invest money there, which can further increase the weakness of the rupee.

What is the impact of RBI’s action?

Dr. Aastha Ahuja, economist at Aryabhatta College, Delhi University, says that RBI policies have a direct impact on the direction of the stock market—changes in interest rates, availability of liquidity and investor sentiments, all three together decide the movement of the market. While the cash flow in the market increases due to reduction in repo rate, economic activities accelerate due to cheaper loans for companies and consumers.

But it also impacts the balance of payments (BOP), inflation and the strength of the rupee, which has already weakened and gone above 90 against the dollar. According to Ahuja, while large cap shares are performing well in the stock market at present, mid-cap and small-cap sectors are under pressure, the main reason for which is lack of demand in the market. In view of this entire situation, RBI has to run its monetary policy in a very balanced manner so that while keeping inflation under control, economic growth also gets momentum and the fall of rupee can also be stopped.

Also read: Rupee’s decline is not stopping even after crossing 90, again defeated by US dollar

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Exclusive: Why does the entire market start dancing with just one announcement from the Monetary Committee of RBI?

Admin — Tue, 09 Dec 2025 10:59:23 +0000

RBI Monetary Policy Committee: The Monetary Committee (MPC) meeting of RBI and its policy decisions are taken every two months, which have a direct impact on the Indian economy, markets and common people. The aim of the central bank is to control inflation, ensure stability of the rupee and maintain economic momentum. The MPC consists of a total of six members—three nominated by the RBI and three nominated by the Central Government. Its main objective is to keep inflation within the range of 4 percent on an average.

What does MPC do?

Often a question arises in the minds of people that how do the decisions taken in the MPC meeting affect everything from markets and loans to EMIs and employment. Dr. Aastha Ahuja, Professor of Aryabhatta College, Delhi University, says that when the Central Bank makes a policy, it has a direct impact on the interest rates, liquidity available in the market and the sentiments of investors. The change in interest rates is basically based on the fluctuations in the repo rate.

Recently, RBI has reduced the repo rate by 25 basis points, which brought it down to 5.25 percent. This makes borrowing cheaper and increases the purchasing power of consumers, which encourages investment and demand. However, in such a situation, the risk of capital outflow may increase, because the interest rates in foreign markets are high. This affects the rupee, inflation and balance of payments (BOP). At present the rupee has already weakened against the dollar and has crossed 90.

How are each sector affected?

Talking about the stock market, large-cap stocks are performing relatively better, while mid-cap and small-caps are under pressure. The reason for this is lack of demand. RBI figures show that capacity utilization is at 75.8 percent, which means the pace of private investment in the economy is weak. In such a situation, investment will not increase rapidly by merely reducing the repo rate, unless domestic demand increases. To increase demand, the role of fiscal policy of the government becomes very important.

The income and savings structure in India also affects investment. Only 8–9 percent of people in the country are able to save enough, which mostly includes the upper-middle and rich classes. The savings of the middle and lower-middle classes are very low, due to which a large amount of savings go into mutual funds and stock markets, especially when returns on fixed income are uncertain.

Also read: China did wonders amid US high tariffs, made this record for the first time in 11 months, Trump will be upset

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How much will EMI reduce now? There will be a historic decline in home loan rates! There will be huge savings

Admin — Fri, 05 Dec 2025 12:19:56 +0000

Home Loan: The Monetary Policy Committee of RBI has today reduced the repo rate by 25 basis points to 5.25 percent, due to which the home loan rates are expected to fall drastically. It is being told that home loan rates will come down to the level before the Global Financial Crisis in 2008.

Already many banks like Union Bank, Bank of India, Bank of Maharashtra and Indian Overseas Bank are currently offering home loans at 7.35 percent. Due to reduction in repo rate the interest rate will reduce to 7.1 percent. Accordingly, with a rate reduction of 0.25 points on a home loan of Rs 1 crore for 15 years, the EMI will be reduced by approximately Rs 1,440 per month.

Deposit rates will have to be cut

Bankers say that to bring down the home loan price to 7.1% for new borrowers, lenders will have to drastically cut deposit rates or change the spread on the benchmark rate. If this happens, new borrowers may have to pay higher interest than existing floating-rate borrowers.

Unless deposit rates come down, banks’ net interest margins will decline, while non-banking finance companies will benefit immediately from lower funding costs. “This policy is a big help for the NBFC sector and especially for last-mile financiers like Shriram Finance. The continued neutral stance, along with the announcement of buying OMOs worth Rs 1 lakh crore, ensures that liquidity remains good.

What is the opinion of experts?

Ankur Jalan, CEO of Golden Growth Fund, says that from the depositors’ point of view, the 25bps cut in repo rate will raise concerns about declining returns on fixed deposits and other interest-bearing savings. Additionally, this may force banks to reduce deposit rates in the coming months, making it difficult for savers to earn good returns. While low rates can largely support economic growth, wealthy investors and family offices often redirect capital to higher return products like real estate-focused Category II AIFs to maintain real yields, adding to the fundraising momentum for these funds. The low interest rate environment also reduces the cost of capital for developers and strengthens project viability, which in turn increases opportunities for AIFs.

Preksha Singh, CEO of Agrasheel Infratech, said that India’s real estate market has already become a center of attraction for global investors and the NRI community. Now with the reduction in interest rates, investment will become even more profitable. Stable economy, growing demand and low EMIs together will make India the best investment destination in the next few quarters.

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On the other hand, RBI reduced the repo rate, on the other hand shares of real estate companies rose; Why is there so much enthusiasm?

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On the other hand, RBI reduced the repo rate, on the other hand shares of real estate companies rose; Why is there so much enthusiasm?

Admin — Fri, 05 Dec 2025 07:54:45 +0000

Repo rate cut Impact on Real Estate: The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) made a big announcement on Friday by reducing the repo rate by 25 basis points to 5.25 percent. Earlier it was 5.5 percent. As soon as the Reserve Bank announced the reduction in repo rate, it seemed as if the real estate sector came to life. Shares of DLF, Oberoi Realty and Prestige jumped up to 2 percent.

Now the question comes that why is there so much enthusiasm in real estate due to low repo rate? This is because the reduction in repo rates is an indirect boost to the real estate sector as it makes loans cheaper for home buyers, especially in the low-cost and mid-income segments. Let us see how people associated with the real estate industry responded to the repo rate cut by RBI:-

Confidence in real estate ecosystem will increase

Mr. Jash Panchamia, Executive Director, Jaypee Infratech Limited, said, “RBI’s decision to cut the repo rate by 25 basis points has come at a time when inflation is under control and the economy is stable. This step is expected to increase consumption in all sectors, which will strengthen overall economic growth. The housing sector, especially affordable and mid-segment housing, will benefit as low home loan rates will make buyers cautious in purchasing decisions. As a result, this may have a positive impact, which will increase the demand for good houses and strengthen the market activity. Also, investment sentiment will get support and long-term confidence in the real estate ecosystem will increase.

Vikas Garg, Joint Managing Director, Ganga Realty, says, “RBI’s repo rate cut by 25 basis points is a big and positive step for the real estate sector. Due to reduced interest, home loans will become cheaper, which will increase the confidence of buyers and strengthen the demand for mid-income and premium housing. With low EMI, even those buyers who were already waiting for a better environment will be able to take a quick decision.

Real estate liked RBI’s decision

Pradeep Agarwal, Founder and Chairman, Signature Global (India) Limited, says, “We welcome the decision of RBI to reduce the repo rate by 25 bps to 5,25 percent amid falling inflation, , This step will definitely support the ongoing pace of overall economic growth, which will further strengthen demand and investment activity, The real estate sector continues to be on a growth path as the 100 bps reduction in the overall repo rate by the RBI, along with the income tax relief given in the Union Budget and the GST rate rationalization earlier this year, have not only made home loans cheaper, but have also significantly improved the overall affordability for home buyers, “This latest rate cut is expected to further strengthen market sentiment, enhance purchasing power and support continued growth in housing demand across key segments, thereby ensuring real estate remains a preferred long-term asset class,”

Sahil Aggarwal, CEO of Nimbus Realty, says that the market needed relief in interest rates for a long time. This reduction in repo rate is important for both the builder and the buyer. Customer interest in new launches and under-construction projects will increase. This decision can pave the way for 15–20 percent growth in demand in the housing sector from the next quarter. We are confident that the pace of housing activities in NCR will be clearly visible.

Also read:

This government bank will be sold for 60 thousand crores, do you also have an account in it?

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Loan will be cheaper, EMI will be less; RBI again cuts repo rate by 25 points

Admin — Fri, 05 Dec 2025 05:43:37 +0000

RBI Repo Rate: The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has decided to reduce the repo rate by 25 bps to 5.25 percent. Governor Sanjay Malhotra announced this on Friday. With this announcement of the Reserve Bank, the repo rate has now come down from 5.5 percent to 5.25 percent.

Due to reduction in repo rate, the loan will be cheaper, which will reduce the expenditure on EMI and encourage savings. Earlier, MPC meeting was held on October 1, in which the Reserve Bank did not make any change in the repo rate and kept it stable at 5.5 percent.

Economy will enter Goldilocks zone

Announcing the policy review of the last two months, Governor Sanjay Malhotra said, “Since the October 2025 policy, inflation in the economy has been seen to be slowing down considerably.” “Current growth inflation dynamics show a rare Goldilocks period, where growth remains strong.”

Who is called Goldilocks?

Let us tell you that in the language of economists, that period is called Goldilocks, when inflation remains under control and there is continuous growth. This word is taken from the children’s story ‘Goldilocks and the Three Bears’. In this, Goldilocks tries porridge served in three bowls, one of which is very hot, one very cold and one neither very cold nor very hot. Goldilocks eats the third bowl of porridge.

The condition of India’s economy is also similar. There has been a steady economic growth trend, which has prevented recession but is not so fast that inflation increases. That means the pace of development is balanced and stable.

How much did the repo rate reduce this year?

RBI has reduced the repo rate by a total of 100 bps between February and June this year. That means it has been directly brought down from 6.5 percent to 5.5 percent. Then in the meetings held in August and October, there was no change in the rates in the policy.

What is repo rate?

Repo rate is the rate at which the Reserve Bank gives loans to other banks. In such a situation, if the repo rate increases, then the loan from the Reserve Bank becomes expensive for the banks. Now if banks get expensive loans from the Reserve Bank, then the loans given to people will also become expensive. This will increase the burden on customers. Due to this, home loan, car loan, personal loan become expensive. The Reserve Bank increases the repo rate when there is a need to control inflation and increase the liquidity of banks.

Also read:

Big question before the new budget, is the old tax regime going to end? Know the opinion of experts

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Will home-car loan be cheaper? Repo rate cut again in December, RBI Governor Sanjay Malhotra indicated

Admin — Tue, 25 Nov 2025 08:44:30 +0000

RBI Repo Rate Cut: There may be news of relief for the general public, especially for those who are planning to take a new loan or whose EMI for home, car or personal loan is going on. RBI may make another cut in repo rate by the end of this year, which will increase the possibility of reduction in EMI. RBI Governor Sanjay Malhotra has indicated that current economic indicators show scope for a cut in the repo rate.

Big signal before MPC meeting

He said that the final decision on this will be taken in the meeting of the Monetary Policy Committee (MPC) of RBI. His statement has come at the same time when the MPC meeting is going to be held between 3rd to 5th December.

Malhotra said that in the October meeting itself it was indicated that further rate cuts were possible, hence an important announcement could be made in the upcoming meeting. It is noteworthy that between February and June, MPC has reduced the repo rate by about 100 basis points, whereas in August and October the repo rate was kept constant at 5.5 percent.

environment favorable for rate cuts

Experts estimate that there may be a rate cut of up to 25 basis points in December. The main reason behind this possible cut is that according to the Consumer Price Index (CPI), inflation has fallen to a record 0.25 percent in October, which was 1.44 percent in September. On the question of major cut in repo rate, the Governor said that the first goal of the central bank is price stability and the second goal is to support development. Therefore, the bank will neither aggressively cut rates nor adopt a completely defensive stance.

When Sanjay Malhotra was asked a question on the continuously falling value of the rupee, he said that historically the rupee has seen a decline of about three to three and a half percent every year. He said that the aim of RBI is to keep the fluctuations of the rupee as smooth and controlled as possible, so that sudden or sharp changes in the exchange rate do not create economic instability.

Also read: Amidst the falling market and fleeing foreign investors, the rupee showed such strength that the whole world was surprised.

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RBI Mpc Meet: There is no change in repo rate but RBI Governor Sanjay Malhotra gave this good news, know his 7 big things

Admin — Wed, 01 Oct 2025 06:07:35 +0000

Rbi on indian economy: The Reserve Bank of India (RBI) has decided to maintain the repo rate at 5.5 percent, keeping in mind the existing domestic and global conditions. Governor Sanjay Malhotra announced this at a press conference after a three -day Monetary Policy Committee (MPC) meeting on Wednesday. He informed that the attitude of monetary policy has been kept neutral, which means that the central bank will maintain flexibility in rates according to the changing economic situation. Let us know ten big things of RBI Governor Sanjay Malhotra-

1-RBI, while presenting the economic picture of the country, has increased the estimate of GDP growth from 6.5 percent to 6.8 percent. This is definitely good news for the country, because since the American high tariff, the economic front is facing challenges. While the estimate of retail inflation has been reduced from 3.1 percent to 2.6 percent. This is the second consecutive time when there is no change in the repo rate.

2- Governor Malhotra said that due to the repo rate being stable, there is no possibility of change in interest rates of housing, vehicles and other retail loans at the moment.

3-He also informed that from February to June this year, RBI has already reduced the repo rate by 1 percent, due to which there has been a decrease of 0.58 percent in the borrowing cost of new loans.

The 4-RBI further stated that India’s foreign exchange reserves have reached $ 700.2 billion, which is sufficient for imports of about 11 months. Also, in the second quarter of the current financial year, domestic economic activities are expected to be raised.

5-Governor admitted that challenges remain globally, but better monsoon, GST rate cuts and other policy measures will lead to inflation and economic growth will gain momentum.

6-Central bank believes that low inflation and monetary softening will lead to both investment and consumption.

7-Now it is clear that the RBI is in “Weight and Watch” mode-that is, at the moment the direction and global situation of the economy will be monitored with stable rates.

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‘RBI’s decision on repo rate is wise …’ Learn what experts say on the decision taken in MPC meeting

Admin — Wed, 06 Aug 2025 07:25:10 +0000

Repo Rate Cut: The decision taken in the meeting of the Monitoring Policy (MPC) of the Reserve Bank of India (RBI) has been announced. This time, it has been decided to retain the repo rate at 5.5 percent in the meeting. RBI Governor Sanjay Malhotra announced a unanimous result of all the members of the committee by holding a press conference on Wednesday, August 6. He also told that the committee has also maintained its stance on the policy ‘neutral’. Let’s see what experts have to say on this decision of RBI?

Now the right time to move forward

Sakshi Katiyal, chairperson of Home and Sol, says that the decision to keep the repo rate stable due to increasing tariffs worldwide is a sensible step. Due to liberal policies adopted throughout the year, it has become cheaper to take a loan and cash has also increased in the market. Now that inflation is under control and economic activities are gaining momentum, this stability gives a clear indication for both home buyers and developers that now is the right time to move forward.

Real estate will get stability

CRC Group Director (Marketing and Business Management) Salil Kumar says that RBI’s decision to keep the repo rate stable is a welcome and stability step for both residential and commercial real estate segments. By maintaining neutral stand by the central bank, it is also expected that rates may be cut in the coming time, which will further strengthen the market.

He further said, “Stable interest rates for homebeeers maintain the house to buy the house and help them decide with confidence. At the same time, this decision will bring this decision in the commercial sector and the cost of the loan remains stable, especially the interest of investors in office and mixed-use projects may increase. We hope that the RBI will adopt such a balanced stance so that all the property segments can continue to grow longer.

Promotion of housing demand from rate cuts

Ashwani Kumar of Pyramid Infratech says, “In view of the current economic situation, the RBI’s decision to maintain the repo rate at the same level reflects a balanced and cautious attitude. We believe that if the rates were cut, it would have further boosted housing demand and people’s trust would have been strengthened with stability in the market. Such continuity is necessary for the real estate sector, as it helps to maintain the positive thinking of the existing buyers, especially for those who are planning to buy a house for the first time. ”

RBI steps with future thinking

Manit Sethi, director of the Excellent Infra, says, “The RBI’s decision to keep the repo rate stable on 5.5 percent is a steady and future step. In such a policy for the real estate sector, continuity instills long -term trust in both buyers and developers. This makes it easy to take a loan, promotes investment and grows further than festivals. Stability is very important for this sector because it rests on trust and clarity.

RBI’s decision shows the strength of the economy

Trident Realty CEO Parvinder Singh says, “We welcome the RBI’s decision to keep the repo rate stable.” In the current economic environment, which is surrounded by constant inflation and global uncertainties, this stability is not only assuring the real estate sector but also encouraging. The atmosphere of stable interest rates confidence in making future planning to home buyers, on the other hand, gives developers an opportunity to focus on long-term and value-based projects. ‘

He further said, “This decision reflects trust in the strength of the Indian economy and supports a healthy investment environment. This not only strengthens the perception of the residential market, but today’s home further strengthens our commitment to sustainable and future projects keeping in mind the changing needs of buyers and communities.

Luxury housing segment expected demand to boom

At the same time, AU Real Estate Director Ashish Aggarwal said, “We appreciate the RBI’s decision to keep the repo rate unchanged as it gives the real estate sector the necessary stability that is most needed in the current circumstances. In the AU Real Estate we believe that the constant stability in the repo rate leads to the market, especially in long-term long-term investment areas such as luxury property, establishs trust and transparency.

He further says, “Stable interest rates not only increase the power of the house, but also make the home loan more accessible. As the financeing gets easier, we expect a boom in demand in the luxury housing segment, especially from the customers who are looking for the best and customized homes that fulfill their lifestyle aspirations. This stable economic environment not only enhances the confidence of buyers, but also encourages us to manufacture high quality, specific and durable luxury projects.

Also read:

RBI MPC Meeting: Interest rates are not changed between tariff tension, growth rate of 6.5%, RBI Governor Sanjay Malhotra announced

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RBI Mpc Highlights: RBI introduced 6.5% growth, know 5 big things of Sanjay Malhotra

Admin — Wed, 06 Aug 2025 07:11:38 +0000

RBI Repo Rate Cut: After the three -day meeting of the RBI monetary committee, Governor Sanjay Malhotra on Wednesday announced not making any changes in the repo rate. Along with this, they have retained the growth rate of 6.5 percent in GDP during the current financial year (2025-26). Also, the central bank has estimated to reduce the estimate of inflation to 3.7 percent to 3.1 percent.

Let us know the five big things of Governor Sanjay Malhotra-

1. sharing the decision of the third bilateral monetary policy for FY 2025-26, RBI Governor Sanjay Malhotra said that better Southwest monsoon, low inflation, capacity utilization and favorable financial conditions are supporting domestic economic activities. Assistant monetary, regulatory and fiscal policies including strong government capital expenditure are also expected to raise demand. Due to continuous increase in construction and trade in the coming months, there is a possibility of speed in the service sector.

2. Governor Sanjay Malhotra said that the growth rate is strong and remains in line with estimates. However, this is less than our aspirations. The uncertainty of the fee still remains. The benefit of monetary policy is still available. Since February 2025, the impact of one percent cut in repo rate on the economy is still going on.

3. RBI Governor said that the domestic growth rate is stable and is roughly moving as per the assessment. However, some high-existing indicators (such as GST collection, export, power consumption etc.) have given mixed indications in May-June. Malhotra said that there is stability in rural consumption, while the improvement in urban consumption has been observed, especially discretionary expenditure is slow.

4. Sanjay Malhotra said that long-lasting geopolitical stress, global uncertainties and adverse conditions arising from instability in global financial markets are inciting risk to the growth scenario. The governor said, “Keeping all these factors in mind, the actual GDP growth rate for 2025-26 is estimated to be 6.5 percent.” Under this, 6.5 percent in the first quarter, 6.7 percent in the second quarter, 6.6 percent in the third quarter and 6.3 percent in the fourth quarter. At the same time, the actual GDP growth rate for the first quarter of FY 2026-27 is estimated to be 6.6 percent. Risks are equally balanced on both sides.

5. On inflation, the governor said that the consumer price index (CPI) based inflation fell to the eighth consecutive month to 77 months low in June. This decline in inflation has declined mainly due to a steep fall in food inflation. He said, “Inflation estimates for 2025-26 have been more favorable than expected in June.”

Also read: RBI MPC Meeting: Interest rates are not changed between tariff tension, RBI Governor Sanjay Malhotra announced

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