RBI makes surprise cut in interest rate |
The Reserve Bank of India`s monetary policy committee on Thursday reduced the policy interest rate by 25 basis points to 6.25 %, a move that could lead to banks reducing lending rates for consumer and home loans. At the committee`s meeting, the first after Shaktikanta Das took over as the central bank`s Governor, also changed its stance to `neutral` from the earlier `calibrated tightening`. The RBI policy is a very dovish one and signals further rate cuts. Inflation estimates have been revised very sharply lower by the central bank, according to a Livemint report. The six-member monetary policy committee voted 4:2 in favour of the rate cut, while the decision to change policy stance was unanimous. Deputy Governor Viral Acharya and another MPC member, Chetan Ghate, voted for status quo in interest rates, while Shaktikanta Das and three others voted for a cut in interest rates. The monetary policy committee said the rate cut is in consonance of achieving the medium term objective of maintaining inflation at the 4 per cent level while supporting growth.
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