RBI cuts repo rate by 35 basis points to 5.40%

Mumbai:  Reserve Bank of India (RBI) on Wednesday cut repo rate by 35 basis points to 5.40 per cent to give a fillip to the economy. This is the fourth consecutive time that the RBI’s Monetary Policy Committee has reduced the rates. In the earlier three policies, RBI had reduced repo rate by 25 basis points each.

Consequently, the reverse repo rate under the liquidity adjustment facility stands revised to 5.15 per cent, and the marginal standing facility rate and the Bank Rate to 5.65 per cent. In its third bi-monthly policy announced today, RBI has decided to maintain the accommodative stance of monetary policy.

Repo rate is the rate at which RBI lends to banks generally against government securities while the reverse repo is the rate at which RBI borrows money from the banks. Both these rates are key determinants for customers availing loans from banks.

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