RBI cuts Repo and Reverse Repo rate by 25 basis points
India's central bank and banking regulator - the Reserve Bank on Tuesday reduced the short-term lending (repo) and borrowing (reverse repo) rates by 25 basis points. The aim of this move is to signal banks to further cut lending rates to boost the sagging demand.
Now the effective repo rate is 4.75 per cent and and reverse repo rates stands at 3.25 percent.
The cash reserve ratio (CRR), the percentage of deposits that banks keep with the RBI, has been kept unchanged at 5 percent, in the annual monetary policy unveiled by the RBI at Mumbai on Tuesday.
RBI has pegged the economic growth rate for the current fiscal at 6 percent and average inflation at 3 percent for the medium term.
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