Repo Rate Cuts: A Boost for Borrowers Amid High Tariffs

The Reserve Bank of India has cut the repo rate by 25 basis points, prompting state-owned banks like Bank of Baroda and Indian Bank to lower their lending rates. This move aims to counteract the economic impact of steep US tariffs on Indian goods by making borrowing more affordable.

In a bid to bolster the Indian economy adversely affected by US tariffs, the Reserve Bank of India has reduced its key policy rate by 25 basis points. This reduction is the central bank's first in six months and is aimed at enhancing liquidity.

Following this announcement, Bank of Baroda has also decided to decrease its interest rate on loans linked to the repo rate by 25 basis points, bringing the Baroda Repo Based Lending Rate (BRLLR) down to 7.90%. Indian Bank has similarly adjusted its rates, trimming the Marginal Cost of funds based Lending Rate (MCLR) by 5 basis points for a year-long tenure.

The committee, led by RBI Governor Sanjay Malhotra, unanimously supported the rate cut as a measure to support the struggling economy, making loans more affordable and encouraging borrowing. This monetary move aligns with government efforts to drive economic development through GST reforms and regulatory changes.

(With inputs from agencies.)