Reserve Bank of India reduces repo rate from 6.25 percent to 6 percent

RBI keeps repo rate, reverse repo rate unchanged at 6 percent and 5.75 percent

New Delhi, August 2: In a significant moderation in retail inflation, the Reserve Bank of India on Wednesday slashed the repo rate by 25 bps from the present 6.25 per cent to 6 per cent – the lowest in the last six and a half years.

India’s monetary policy committee (MPC) has decided to cut interest rates as a response to a fall in inflation. The latest decision was in accordance with a Bloomberg poll of economists where most of the of respondents had a forecast that there will be a cut in the rates by 25-basis-points.

This is the sixth bi-monthly policy review by RBI’s Monetary Policy Committee. The Committee was formed during last year on the lines of Federal Open Market Committee in the US.

Repo Rate- 6.25%
Reverse Repo Rate- 6%
Marginal Standing Facility Rate (MSF)- 6.50%
Bank Rate- 6.50%
Cash Reserve Ratio (CRR)- 4%
Statutory Liquidity Ratio (SLR)- 20%

After the decision came, the benchmark repo rate has reduced to 6 percent from earlier rate of 6.25 percent. Accordingly, the reverse repo rate has been down to 5.75 percent.