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%