RBI slashes Repo rate |
In the first policy statement under new governor Shaktikanta Das, the Reserve Bank of India on Thursday cut repo rate by 25 basis points (bps) to 6.25 per cent. The policy statement is the first under newly appointed RBI governor who took charge in December last year following sudden exit of Urjit Patel. The repo rate is the rate at which the Reserve Bank lends short-term money to the banks, while the reverse repo rate is the rate at which the central bank borrows money from commercial banks. The central bank has also changed its monetary policy stance to "neutral" from "calibrated tightening" as inflation stood below the central bank`s 4 per cent target. The reverse repo.rate been reduced to 6 per cent. Usually when RBI cuts repo rate, banks typically pass on the benefit to the customers. If the banks decide to pass on the rate cut, then the auto, home and other loans are likely to get cheaper.
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