The Reserve Bank of India’s Monetary Policy Committee (MPC) on June 6, 2025, decided to cut the repo rate by 50 basis points, bringing it down to 5.50%
This marks a continued effort by the central bank to provide monetary support to the economy amid stable inflationary conditions and evolving global headwinds.
“The Monetary Policy Committee (MPC) met on the 4th, 5th and 6th of June to deliberate and decide on the policy repo rate. After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, the MPC decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points to 5.50 per cent with immediate effect,” RBI Governor Sanjay Malhotra mentioned in his statement today.
The decision has been welcomed by various industry stakeholders, especially from the real estate sector, which has long advocated for lower interest rates to boost housing affordability. Developers and consultants say the cut is making home loans more attractive and is likely to support demand in both mid-income and premium housing segments.
Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd., said, “The twin reduction of the repo rate by 50 basis points to 5.50% and cash reserve ratio by 100 basis points to 3% respectively by the RBI provides significant relief for homebuyers across the country. This bold move by the apex bank comes at a crucial time when inflation is easing, and the economy requires strong stimulus to sustain growth. The reduction in CRR is expected to infuse significant liquidity in the banking system, which will prompt banks to lend even more.
The demand for mid and premium segment homes has already been on the rise following previous rate cuts, and this larger reduction will further accelerate interest from both homebuyers and investors.”
Mr. Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation, said, “The Reserve Bank of India’s decision to cut the repo rate by 50 basis points, along with a 100 basis points reduction in the Cash Reserve Ratio (CRR) to 3 percent, is a strong and timely measure to support the real estate sector and other industries. With today’s policy changes, interest rates have now fallen by 100 basis points from last year’s level. We welcome this decision with open arms, as a reduced repo rate translates to lower borrowing costs, while the CRR cut will enhance liquidity in the banking system.”
Mr. Aman Sarin, Director & Chief Executive Officer, Anant Raj Limited, said, “The RBI’s decision to cut the repo rate by 50 basis points—the third cut this calendar year, following two earlier cuts of 25 basis points each—reflects a clear push towards supporting credit growth and economic activity. For both existing and new borrowers, this cumulative 100 basis point reduction will provide significant relief in terms of reduced interest burden. Additionally, the move is expected to inject more liquidity into the system, further stimulating economic momentum.”
Mr. Raoul Kapoor, Co-CEO, Andromeda Sales and Distribution Pvt Ltd, said, “There was strong anticipation in the market that the RBI would opt for a 50 basis point rate cut in this policy review—and the central bank delivered exactly that. With this move, the total repo rate reduction for the calendar year now stands at 100 basis points, which is quite significant in the current economic context. This cumulative easing is expected to bring considerable relief to retail loan borrowers, particularly those with large-ticket loans such as home loans, where even small reductions in interest rates can translate into meaningful savings over time.”