Repo Rate
RBI cuts repo rate by 25 basis points, first in five years
New Delhi/IBNS: The Reserve Bank of India (RBI) on Friday reduced the repo rate by 25 basis points from 6.5% to 6.25% in another step to boost the economy, media reports said.
This is the first time in five years the RBI has reduced the repo rate.
The last time when the rate was reduced was in May 2020.
RBI Governor Sanjay Malhotra said India is not immune to the challenging global economy, which is growing at a slower rate.
Monetary Policy Statement by Shri Sanjay Malhotra, RBI Governor- February 07, 2025, 10 am https://t.co/mkTluoMAZX
— ReserveBankOfIndia (@RBI) February 7, 2025
The repo rate cut was announced just days after the Union Budget 2025 provided a huge relief to the middle class taxpayers by exempting tax on an annual income up to Rs. 12.
Union Finance Minister Nirmala Sitharaman presented the Union Budget 2025 with a focus on encouraging private investment, assuaging the middle-income constituency and strengthening growth.
Amid high food inflation and shrinking disposable incomes that affected the country's growth story, the FM, who has been accused of unleashing tax terrorism earlier, announced transformative reform in taxation while addressing farmers, the poor and youth besides women.
The FM said the salaried class will not pay any income tax upto Rs 12.75 lakh per annum in the new tax regime while recognising the four engines of growth- agriculture, MSME actor, investment and exports.
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