RBI policy review: Raghuram Rajan introduces 25 bps repo rate cut to 6.50 pct

Apr 05 2016 11:41 AM
RBI policy review: Raghuram Rajan introduces 25 bps repo rate cut to 6.50 pct

Reserve Bank of Indian policy review:In one of the most certain monetary policy reviews in  current  months.The RBI Governor Raghuram Rajan introduced a 25 bps repo rate cut today to 6.5 pct - a 5-year low.

RBI cuts off  minimum daily allowance of CRR(Cash reserve ratio) from 95 % to 90 % which is effective April 16, but leaves the CRR unaffected at 4 pct.

Still in a surprise move, the RBI also hiked the reverse repo - or the rates lenders charge to the central bank - by 25 basis points to 6.0 %, while taking measures to assure more big break of cash in the banking system.

If banks pass on the aids of repo rate cut to loan takers, EMIs will fall and new loans will turn cheaper.

Reserve Bank of India says, “ it will remain accommodative in its policy stance going forward. Sensex was down 131 pts just ahead of announcement”

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