In a big relief to the home buyers and home owners, RBI Governor Raghuram Rajan has reduced the repo rate by 50 basis points to 6.75%, which means home loan and auto loan rates will get cheaper once the banks pass the benefits to the consumers. A 25 basis points cut was expected earlier. But, Rajan surprised all by making it 50 basis points.
“We pay attention to what the Fed is doing, but it isn’t the central issue we focus on,” said Rajan on Indian Economy. “The January 2016 target of 6% inflation is likely to be achieved”, he added.
The FY16 real #GDP growth estimate has been fixed to 7.4%. “The RBI will issue final guidelines on base rate computation by November-end. Policy goals must be steady and predictable, the intent is to work together and move forward,” said Raghuram Rajan.