RBI Rate Cut: Home and Car Loan EMIs may get Cheaper, Rajan Said
April 6, 2016: RBI has cut repo rate on April 5, 2016, by 25 basis points. During the Monetary Policy Review Meet, Raghuram Rajan has announced the rate cut. After this cut, the current repo rate is 6.50 per cent. The RBI has kept Cash Reserve Ratio unchanged at 4 per cent and raised the Reverse Repo Rate by 25 basis points to 6 per cent.
The Governor of RBI, Raghuram Rajan has said that this rate cut will help to maintain the liquidity flow in the market and will make banks lowering their borrowing rates. RBI has also implemented a new change in the lending rate policy. According to this policy, banks will consider the marginal cost of lending rates every month instead of doing it quarterly.
"The introduction of MCLR since April 1 will help" in bringing the borrowing cost down, Rajan added. This move will surely make the EMIs cheaper as the market is expecting a boost in the growth.