RBI cuts repo rate by 25 bps

In an unexpected move, the Reserve Bank of India on Wednesday announced cut in the repo rate by 25 basis points to 7.5 percent. The reverse repo rate cut down to 6.5 percent and the cash-reserve ratio (CRR) remained unchanged at 4 percent.

This move will surely encourage the banks to lowering the EMIs.

Minister of the State in Finance Jayant Sinha welcomed RBI’s move and said that it will boost Indian economy.

“We have limited room to provide relief to tax payers. But with RBI rate cut, I see EMIs coming down significantly,” Sinha said.

In a statement, RBI governor Raghuram Rajan said, “Further monetary actions will be conditioned by incoming data, especially on the easing of supply constraints, improved availability of key inputs such as power, land, minerals and infrastructure, continuing progress on high-quality fiscal consolidation, the pass through of past rate cuts into lending rates, the monsoon outturn and developments in the international environment.”

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