Interest Rates reduced RBI by 25 basis Points to 5.75%

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The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) reduced interest rates by 25 basis points to 5.75% with immediate effect amid slowing economic growth and rising global uncertainty, for the 3rd time in a row.

  • RBI Governor Shaktikanta Das announced it in the second bi-monthly monetary policy statement for 2019-20.
  • The reduction is expected to bring down the EMIs on home and auto loans and reduce the debt repayment burden on corporates.

repo rate :

  • It is the rate at which the central bank of a country, that is RBI, lends money to commercial banks in the event of any shortfall of funds.
  • The monetary authorities use this to control inflation.
  • The banks can borrow money for about 7 to 14 days from the Reserve Bank of India.

Current status of different rates:

  • Policy Repo Rate: 5.75%
  • Reverse Repo Rate: 5.50%
  • Marginal Standing Facility Rate: 6.00%
  • Bank Rate: 6.00%
  • CRR: 4%
  • SLR: 19.00%