EMI Relief Coming? RBI Likely to Cut Repo Rate in December, Home Loan EMIs May Fall

EMI: Is the Reserve Bank of India going to make a key decision on the repo rate? Will loan borrowers get huge relief? The answer seems to be yes. Here's what it's all about.

Chance of repo rate cut in December

RBI Governor Sanjay Malhotra hinted at a possible repo rate cut in the December policy review, citing favorable economic conditions, lower inflation, and better growth.

Hints in the last MPC meeting

Malhotra recalled the October MPC meeting hinted at a rate cut. After a 100 bps cut in H1, rates held steady. Now, with retail inflation at a low of 0.25%, a cut seems likely.

What is the market's reaction?

After the Governor's comments, the 10-year bond yield fell slightly. Firms like Morgan Stanley expect a 25 bps cut in December, but OIS rates suggest rates might not change.

Rupee's status: A natural decline

Sanjay Malhotra said the rupee's fall is natural, about 3-3.5% annually for a growing economy. The rupee has fallen over 4% this year, but the RBI will only intervene if needed.