Biznext India : The Reserve Bank of India today decided to reduce the Repo Rate by 25 basis points from 6.5% to 6.25% with immediate effect. The Reverse Repo rate has been adjusted at 6.00 % and the Bank Rate at 6.5%. The reduction in Repo Rate is expected to be translated into lower Bank EMI.
“On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.5 per cent to 6.25 per cent with immediate effect. Consequently, the reverse repo rate under the LAF stands adjusted to 6.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.5 per cent. The MPC also decided to change the monetary policy stance from calibrated tightening to neutral” RBI said after the MPC meeting.
Sixth Bi-monthly Monetary Policy Statement, 2018-19
Resolution of the Monetary Policy Committee (MPC), RBI
“These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth” it added.
The decision to change the monetary policy stance was unanimous. As regards the reduction in the policy repo rate, Dr. Ravindra H. Dholakia, Dr. Pami Dua, Dr. Michael Debabrata Patra and Shri Shaktikanta Das voted in favour of the decision. Dr. Chetan Ghate and Dr. Viral V. Acharya voted to keep the policy rate unchanged. The MPC reiterates its commitment to achieving the medium-term target for headline inflation of 4 per cent on a durable basis. The minutes of the MPC’s meeting will be published by February 21, 2019.
The next meeting of the MPC is scheduled from April 2 to 4, 2019.