BusinessIndia

RBI slashes repo rate by 40 bps

Mumbai: To ease the financial stress in the country, the Reserve Bank of India on Friday cut policy repo rate by 40 basis points to 4.0

The reverse repo rate now stands reduced to 3.35 pc while the MSF rate is down to 4.25 pc while laying out the economic conditions prevailing in India amid the ongoing coronavirus crisis.

RBI Governor Shaktikanta Das has also extended the moratorium period by another three months from June 1 to August 31 due to lockdown extension

The RBI Monetary Policy Committee voted unanimously for a reduction in the policy repo rate, while voted 5:1 in favour of the quantum of the cuts.

RBI’s Monetary Policy Committee met again from May 20-22.

MPC voted to 5:1 majority to reduce the policy repo rate by 40 basis points from 4.4 to 4 per cent,” Shaktikanta Das said.

Earlier, the RBI governor had announced several measures to ease liquidity pressure in the banking system and to boost the economy from the coronavirus shock, including a sharp 75 basis points rate cut in March.

Governor Das said that India’s gross domestic product (GDP) will see contraction and may well be in negative territory in FY21.

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