RBI Cuts Repo Rate, CRR to Boost Indian Economy, Housing Demand

The Reserve Bank of India (RBI) has cut the repo rate by 50 basis points to 5.50%, marking the third consecutive reduction to stimulate economic growth amid easing inflation and evolving global conditions. This move also included a 100 basis points cut in the Cash Reserve Ratio (CRR) to 3%, aiming to increase liquidity in the banking system and encourage lending. RBI Governor Sanjay Malhotra noted that the Monetary Policy Committee (MPC) shifted its stance from 'accommodative' to 'neutral' while maintaining the GDP growth forecast at 6.5% for FY 2025-26 and lowering inflation expectations to 3.7%. The rate cuts are expected to reduce borrowing costs for consumers, particularly benefiting home, auto, and corporate loan borrowers, which has been welcomed by real estate developers anticipating increased demand in mid and premium housing segments. In the United States, Freddie Mac reported a slight decrease in the average 30-year fixed mortgage rate to 6.85%, offering some relief to homebuyers amidst slowing house price growth and improving inventory. These monetary policy adjustments reflect coordinated efforts to support housing affordability and overall economic stability in both India and the U.S.