The change marks the first rate cut since October 2016 and the interest rate is now at a six-year low.
The Reserve Bank of India (RBI) logo is pictured outside its head office in Mumbai May 3, 2011. Credit: Reuters/Danish Siddiqui
Mumbai: The Reserve Bank today slashed benchmark lending rate by 0.25% to 6%, citing reduction in upside risk to inflation – a move that will lower EMIs for home, auto and personal loans.
This is the first rate cut since October 2016 and the interest rate is now at a six-year low.
In line with record low retail inflation, the RBI-governor-headed Monetary Policy Committee cut the policy repo rate by 25 basis points to 6% and the reverse repo by similar proportion to 5.75%.
The MPC has also decided to keep the policy stance neutral and to watch incoming data with a view to keeping headline inflation close to 4%.
It stressed on urgent need to reinvigorate private investments, clear infrastructure bottlenecks and provide a major thrust to the Pradhan Mantri Awas Yojana.
RBI said it is working in close coordination with the government to resolve large stressed corporate borrowings and recapitalise public sector banks.
(PTI)