The Reserve Bank of India (RBI) has cut the repo rate by 50 basis points to 5.5%, marking its third consecutive reduction. This move aims to boost economic growth and ease borrowing costs. Here's what you need to know ¹ ²: - *Repo Rate*: Reduced to 5.50% from 6.00% - *Standing Deposit Facility (SDF)*: Adjusted to 5.25% - *Marginal Standing Facility (MSF) & Bank Rate*: Down to 5.75% - *Cash Reserve Ratio (CRR)*: Cut by 100 basis points to 3%, adding to already surplus liquidity The RBI's decision to cut the repo rate is driven by cooled inflation, which dropped to 3.2% in April 2025, the lowest in nearly six years. This trend is attributed to falling food prices, moderate fuel costs, and stable core inflation. The policy stance has shifted from "accommodative" to "neutral" ³. *Impact on Loans and EMIs:* - *Lower Interest Rates*: The rate cut may lead to reduced EMIs for borrowers, making loan repayment more manageable. - *Increased Loan Eligibility*: Lower interest rates can increase loan eligibility, making it easier to qualify for a loan ³. *Economic Projections:* - *GDP Growth Projection*: Unchanged at 6.5% for FY26 - *CPI Inflation Projection*: Down to 3.7% for FY26 from 4% earlier ⁴