Question

What was the key reason for the RBI cutting the repo

Q: Answer-What was the key reason for the RBI cutting the repo rate by 25 bps to 6.25% in February 2025?

The RBI cut the repo rate by 25 bps to 6.25, marking the first rate cut in five years. This move was intended to reduce borrowing costs, stimulate investment, and boost economic growth. Lower interest rates allow businesses and individuals to borrow at lower costs, promoting spending and economic activity.

rate by 25 bps to 6.25% in February 2025?

A To control inflation and increase loan interest rates

B To encourage borrowing and investment by reducing loan interest rates

C To increase fixed deposit (FD) returns for investors

D To discourage credit growth and reduce money supply

E To curb excessive foreign direct investment (FDI)

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What was the key reason for the RBI cutting the repo

Solution