RBI Lowers Repo Rate To 5.15%, 5th Straight Cut, Loans May Get Cheaper
The Reserve Bank of India's six-member Monetary Policy Committee headed by Governor Shaktikanta Das lowered the repo rate by 25 basis points to 5.15 per cent while maintaining its accommodative stance in move to boost the slowing economic growth. The repo rate is the rate at which the central bank lends short term funds to the banks.
With today's rate cut RBI lowered its repo rate for the fifth consecutive time this calendar year. The RBI has in total reduced the repo rate by 135 basis points or 1.35 percentage points.
"These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth," RBI said in the policy document.
The decision to cut repo rate by the Reserve Bank of India was agreed upon by all the Monetary Policy Committee members.
In a Reuters poll, a majority of the analysts had predicted the monetary policy committee (MPC) would cut the repo rate to 5.15 per cent.
The Reserve Bank of India slightly revised its inflation target upwards to 3.4 per cent for the second quarter of the current financial year while projections were retained at 3.5-3.7 per cent and 3.6 per cent for first quarter of 2020-21.
The Reserve Bank of India also lowered its growth projection to 6.1-5.3 per cent for second quarter of current financial year and in the range of 6.6-7.2 per cent for the second half of the current fiscal.
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