The Reserve Bank of India (RBI) has cut the repo rate by 35 basis points to 5.40 per cent. It has also trimmed GDP growth forecast for current fiscal to 6.9 per cent from 7 per cent previously predicted. The decision was taken at the Monetary Policy Committee (MPC) on the basis of an assessment of the current and evolving macroeconomic situation.
The MPC also decided to maintain the accommodative stance of monetary policy.
The Central Bank said the reverse repo rate under the LAF stands revised to 5.15%, and the marginal standing facility (MSF) rate and the Bank Rate to 5.65%. On the issue of transmission of rate cuts, the RBI said banks reduced their weighted average lending rates (WALRs) on fresh rupee loans by 29 bps during the current easing phase so far (February-June 2019).
Highlights: RBI revises GDP forecast and cuts repo rate
RBI cuts repo rate by 35 bps to 5.40 pe rcent
Reverse repo rate adjusted to 5.15 per cent
Marginal standing facility (MSF) and bank rate adjusted to 5.65 per cent
Four MPC members including governor Shaktikanta Das voted for 35 bps cut and two voted for a 25 bps cut