1. What Exactly Is the Repo Rate?
- Repo (repurchase) rate is the interest at which the Reserve Bank of India lends short-term funds to commercial banks.
- A 50 basis-point (bps) move = 0.50 percentage-point change; e.g., 6.00 % → 5.50 %.
- Lower repo = cheaper bank funding → potential cut in lending & deposit rates.
Why everyone’s Googling it: Today’s surprise half-point cut is the third reduction in 2025, bringing the cumulative easing to 100 bps. (reuters.com)
2. RBI Monetary Policy Highlights (6 June 2025)
| Decision | New Level | Change |
| Repo rate | 5.50 % | –50 bps |
| Cash Reserve Ratio (CRR) | 3.0 % | –100 bps (phased) |
| Policy stance | Neutral | from “accommodative” |
RBI Governor Sanjay Malhotra said the “front-loaded” cut aims to spur credit growth as inflation stays within target. (timesofindia.indiatimes.com, timesofindia.indiatimes.com)
3. Impact on Home-Loan EMIs
Most banks benchmark floating-rate mortgages to the external benchmark lending rate (EBLR) = repo + spread.
| Example | Before cut (6.00 %) | After cut (5.50 %) |
| ₹50 lakh loan · 20 yrs | ₹42,985 EMI | ₹40,826 EMI |
A 50 bps drop shaves ~₹2,150 per month—use your bank’s calculator once the new rates update (usually within 1–3 weeks).
4. What About FD & Savings Rates?
- Expect fixed-deposit (FD) rates to drift lower over the next quarter as banks’ cost of funds falls.
- Senior-citizen schemes may hold rates a bit longer, but shop quickly if you want to lock in.
Trending query “repo rate effect on FD” answers: returns inch down, but spreads between tenures (1-yr vs 5-yr) often widen in an easing cycle.
5. CRR Cut: Why It Matters
CRR is the cash banks park with RBI, earning zero interest. A 100 bps CRR cut releases roughly ₹1.3 trn liquidity, letting banks:
- Lend more aggressively (housing, MSME).
- Avoid an immediate deposit-rate cut, softening the blow for savers.
6. Market Reaction — Bank Nifty & Nasdaq Today
- Bank Nifty jumped over 1 % intraday on hopes of margin expansion. Query: “bank nifty today”.
- Global risk-on mood (“Nasdaq today”) stayed supportive; foreign inflows may accelerate if the easing cycle continues.
7. Key Dates to Watch
| Event | Date* | Why care? |
| Next MPC meeting | 8 Aug 2025 | Will RBI pause or cut again? |
| India CPI release | 12 July | Dictates room for more easing |
| US Fed meet | 30 July | Cross-currency impact on INR |
*Tentative; RBI will confirm policy calendar soon.
8. FAQs
1. What is the repo rate today?
5.50 % after a 50 bps cut on 6 June 2025.
2. Why did RBI cut 50 bps instead of 25 bps?
Weak growth + subdued inflation let MPC front-load support.
3. Will SBI & HDFC cut home-loan rates immediately?
Most pass-through happens within a month for floating-rate loans.
4. What does 50 bps mean?
0.50 percentage point.
5. How does a repo cut affect FD returns?
0.50 percentage point.
6. CRR vs repo—difference?
Repo = cost of overnight funds; CRR = mandatory zero-interest reserve.
9. Bottom Line for Borrowers & Investors
- Home-loan borrowers: Expect EMI relief within weeks; consider switching to repo-linked loans if still on older MCLR.
- Savers: Lock FDs now if you need guaranteed returns; ladder maturities to hedge future cuts.
- Equity investors: Rate-sensitive sectors (real estate, auto) gain tail-winds; watch for profit-booking if global cues turn.