Reserve Bank Of India / A big prediction has been made, how much cheaper will the RBI make loan EMI in April

According to India Ratings and Research, RBI may cut the repo rate by 0.25% in April 2025. A total reduction of 0.75% is possible in the year 2025-26. Inflation is expected to decrease, which may make loans cheaper. RBI's main goal will be stable inflation.

Reserve Bank Of India: The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) may cut policy rates in the coming months, which will boost economic activity. According to reputed credit rating agency India Ratings and Research, a 0.25 percent cut in the repo rate is possible in April 2025. If this estimate proves to be correct, loans may become cheaper for consumers and businesses.

Analysis of India Ratings

Devendra Kumar Pant, Chief Economist, India Ratings and Research, says that headline inflation may come down to 4.7 percent in FY 2024-25. Based on this, RBI may cut a total of 0.75 percent in the year 2025-26. However, due to retaliatory tariffs imposed by the US or other global economic factors, there is also a possibility of further policy easing.

Loans may become cheaper in April 2025

The Monetary Policy Committee (MPC) may bring the repo rate to 6.25 percent in April 2025, which may lead to a decline in interest rates in the banking sector.
From May 2022 to February 2023, RBI had increased the repo rate to 6.5 percent by increasing it by 2.50 percent continuously.
It was cut by 0.25 percent in February 2025, and now it is at 6.25 percent.
If there is another cut of 0.25 percent in April 2025, it can come down to 6.0 percent.

A total of 0.75% cut possible in FY 2025-26

The rating agency believes that RBI can cut the policy rate by a total of 0.75 percent in three phases. This can bring the repo rate to 5.5 percent by the end of 2025-26. With this, average inflation is likely to remain around 4 percent, which will make the real repo rate 1.5 percent.

Economic growth and RBI strategy

Recent statements by the RBI make it clear that the central bank's priority is to control inflation, but at the same time it also wants to promote economic growth.
The February 2025 monetary policy meeting indicated that the RBI is cautious about slowing growth.
If inflation remains stable, further cuts in the repo rate are possible, which can further reduce loan rates.
If inflation remains below the 4% level, the RBI's monetary policy can be more flexible.