Coming to pleasant surprise, Reserve Bank of India (RBI) given hopes of lower EMIs for home loan borrowers. The RBI has slashed the repo rate by 0.25% to bring it to 7.50 percent from 7.75 percent. The cash reserve ratio (CRR) of scheduled banks remains unchanged at 4%.
The government welcomed a surprise interest rate cut as good news for the economy that would softening in the inflation rate and the fiscal consolidation roadmap outlined by the government.
RBI governor Raghuram Rajan said the move was prompted by the recent fall in consumer inflation, recorded at 5.1 percent in January, as well as the recent Union Budget, which had structural reforms embedded in it.
RBI rate cut will give a boost to economy; EMIs will also come down significantly. Also rate cut also gave a boost to equities, with the Indian stock market benchmark Sensex touching its highest peak 30,000 level for the first time.