In a bid to increase liquidity and boost investment the Reserve Bank of India (RBI) has announced a cut in repo rate by 35 basis points to 5.40 per cent.
This is the fourth consecutive occasion that the Monetary Policy Committee has brought down rates. This is the boldest rate cut by RBI compared to the earlier three occasions as the central bank had previously reduced repo rates by 25 basis points.
The reverse repo rate has been revised to 5.15 per cent, while the marginal standing facility rate and the Bank Rate is fixed at 5.65 per cent.
Both the Repo and reverse repo rates are important factors for customers availing loans from banks.
On the question of inflation RBI Governor Shaktikanta Das declared that headline inflation for Q 1 of 2019-20 stood at 3.1 percent.
The RBI has marginally lowered its GDP growth prediction for current fiscal to 6.9 percent down from 7 percent which was previously forecasted.
