Good News For Homebuyers: RBI Likely To Cut Repo Rate By 0.25% On June 6

There is good news for homebuyers as the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) is most likely to cut the repo rate by 25 basis points (bps) in the upcoming review meeting scheduled for June 6, 2025, according to a Reuters poll.

RBI MPC Dates

The central bank's MPC will convene on June 4 and deliver its outcome on June 6, 2025.

What Happened In The Previous MPC?

In April, the central bank, while cutting its repo rate, changed its stance to 'Accommodative' from 'Neutral', as there was a need to monitor and assess the economic outlook.

An 'Accommodative' stance means that the central bank is prepared to expand liquidity further in the market, in order to boost economic growth.

Accordingly, during such a time period the central bank is willing to cut the interest rates and a rate hike is ruled out.

This policy stance is typically adopted when growth needs policy support and inflation is not a concern.

RBI's Dividend

Additionally, the central bank had recently given a dividend of Rs 2.69 lakh crore which will help the Centre's fiscal deficit target of 4.4% this year.

How Is This Beneficial For Homebuyers?

A reduced repo rate also implies reduced rates of interest for individuals taking loans. However, not every bank reduces interest rates as the repo rates are reduced and only certain banks will give the benefits of this situation to its consumers.

This happens as the RBI lends money to commercial banks, therefore, a lower repo rate will make loans more affordable and accessible.

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