The Reserve Bank of India cut the repo rate by 25 basis points for a third consecutive time on Thursday and also shifted its stance to accommodative from neutral amidst concerns about slowing growth. The repo rate has now been reduced to 5.75 % from 6%.
Repo rate is the interest rate at which the RBI lends money to banks. When the cost of borrowing goes down for banks, they are able to lower their respective marginal cost of funds based lending rate (MCLR), which directly impacts your loans.
With this cut, the repo rate has slipped to its lowest level since July 2010. The six-member MPC unanimously voted for the rate cut by 25 basis points and the stance change in its policy. RBI Governor Shaktikanta Das said the apex bank would take all the necessary steps to ensure adequate liquidity in the system.
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.
Repo rate is the interest rate at which the RBI lends money to banks. When the cost of borrowing goes down for banks, they are able to lower their respective marginal cost of funds based lending rate (MCLR), which directly impacts your loans.
With this cut, the repo rate has slipped to its lowest level since July 2010. The six-member MPC unanimously voted for the rate cut by 25 basis points and the stance change in its policy. RBI Governor Shaktikanta Das said the apex bank would take all the necessary steps to ensure adequate liquidity in the system.
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.
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