RBI Monetary policy update: In a massive relief for the consumers who are planning to take home or car loans the Reserve Bank of India (RBI) is expected to cut interest rates by 25 basis points in the fourth quarter of 2025. Providing massive relief to people taking home and car loans as their EMIs can be reduced further the rate cuts will boost the economic growth. As per media reports HSBC Global Research has said that keeping in mind the fall in export orders and a reduction in government spending the Reserve Bank of India may decide to lower the repo rate in the impending Monetary Policy Committee review.
Why RBI may reduce interest rates?
HSBC pointed out that the recent GST cuts may slow the rise in prices of personal care items. Rain-related supply constraints pushed up prices of vegetables and fruits in August while prices of cereals and pulses fell. Excluding food fuel housing and gold core inflation stood at 3.2 per cent well below the RBIs target.

According to the report inflation may remain under control for a long time for the remaining quarter of the year. To be precise the average inflation of the current quarter is estimated at 1.8 percent which is lower than the RBI estimate of 2.1 percent. Also the Consumer Price Index based inflation is estimated to be between 1 to 1.5 percent in September which is expected to help RBI take the decision to lower the repo rate.
Story highlights:

The RBI is expected to cut interest rates by 25 basis points.
The rate cut is expected as inflation may remain under control for a long time.
The rate cut may reduce interest rates on bank and car loans.

Will car and home loans get cheaper?
For the consumers if the RBI Monetary Policy reduces the repo rates the interest rates of loans like Home loan and Car loans are expected to reduce as the bank loan interest rates are guided by the Repo rate decided in the RBI Monetary policy review.