RBI Trims Repo Rate by 25bps to 5.15% and GDP Estimate for 2020 to 6.1%


A six-member Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) cut the repo rate or lending rate by 25 basis points (bps) or 0.25% on Friday.

The repo rate got revised from 5.40% to 5.15%. This is lowest repo rate since March 2010. The six-member MPC decided to revive growth with inflation at target.

Five members of the MPC with RBI governor Shaktikanta Das voted for 25 bps cut. The sixth member Ravindra H Dholakia proposed for 40 bps cut in repo rate.

Now, reduced repo rate will allow customers to get reduced loan interest rates and lower equal monthly installment (EMI) from banks.

With the Gross Domestic Product (GDP) at its worst since the global economic crisis of 2008-09, the MPC panel reduced the current fiscal rate from 6.9% to 6.1%.

The RBI Governor Das said, inflation for the second quarter (Q2) of fiscal year 2020 (FY20) has been revised to 3.4% and the inflation rate for second half (H2) of 2020 has been estimated at 3.5%-3.7%.


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