European Central Bank cuts interest rates, will RBI now reduce your loan EMI?

After the Lok Sabha elections, there are signs of a slight change in the tone of the new government in India due to the grand alliance. Before the formation of government in India, the economic system of the world has seen a major change. The European Central Bank ECB has cut policy interest rates. This is the first time since 2019 that the European Central Bank has changed its interest rates.

The ECB cut the benchmark interest rate by 25 basis points or 0.25 percent. This interest rate cut by the European Central Bank will affect the economies of most European countries.

The interest rate was raised to 3.75 percent

Until now the interest rate of the European Central Bank was 4 percent which has now come down to 3.75 percent. A 26-member committee at the ECB headquarters in Frankfurt has decided to cut interest rates. The ECB said in its statement that price pressures have weakened. Apart from this, the signs of falling inflation are showing up everywhere so the interest rates have been reduced.

The ECB's decision comes at a time when the US Federal Reserve is already likely to cut interest rates worldwide. In America, the decision is also to be taken in June itself. India's central bank RBI is also going to take a decision on this. This ECB decision is likely to increase consumption and demand in Europe.

Will RBI reduce your EMI now?

After this reduction in interest rates by the European Central Bank, now people's eyes are on the RBI's decision in India. Reserve Bank of India's Monetary Policy Committee i.e. MPC meeting is going on. RBI is going to announce its bi-monthly monetary policy today on June 7. In this it may decide to cut the repo rate which has been at 6.5 percent for over a year.

Bank loan rates in the country will come down if RBI cuts interest rates under monetary policy tomorrow. Because of this, the EMIs of people from home loans to personal loans are likely to decrease.