5 Benefits of repo rate cut

5 Benefits of repo rate cut

1. Lower loan interest rates

When the repo rate is cut, banks can borrow from the central bank at a lower cost, often passing these benefits to customers.

2. Boost to economic growth and liquidity

By lowering the cost of funds, repo rate cuts inject liquidity into the economy. This encourages banks to lend more, improving credit flow.

Insurance policies offer tax deductions for the premium paid under sections like 80C and 80D of the Income Tax Act under the old regime.

3. Positive impact on equity markets

4. Relief for existing borrowers

Borrowers with floating-rate loans, such as home loans, see a direct benefit as their EMIs decrease or their loan tenure shortens.

5. Encouragement for alternative investments

As fixed deposit (FD) and other fixed-income returns decline, investors may seek higher returns in equities and other asset classes.