The Reserve Bank of India reduced the repo rate by 25 bps to 5.15% on Friday to boost growth while keeping the policy stance accommodative.
“The MPC decided to continue with an accommodative stance as long as it is necessary to revive growth while ensuring inflation remains within the target range.
The RBI revised GDP growth for FY20 to 6.1% from 6.9% predicted in the last policy held in August.
All the six members voted in favour of a rate cut, the RBI said.
Highlights of RBI’s monetary policy statement
- Repo rate or short-term lending rate reduced by 25 bps to 5.15%
- It is fifth rate cut in 2019
- GDP growth forecast lowered for current fiscal to 6.1% from 6.9%
- RBI continues with its accommodative monetary stance to revive economic growth
- Government stimulus measures to help strengthen private consumption and spur investments
- Continuing slowdown warrants intensified efforts to restore growth momentum
- Retains retail inflation projection for second half of year at 3.5-3.7%
- RBI notes monetary transmission has been staggered and incomplete
- Foreign exchange reserves stood at $434.6 bn on Oct 1, up $21.7 bn over March-end 2019
- All members of Monetary Policy Committee (MPC) voted for rate cut
- Next monetary policy review meet scheduled during December 3-5, 2019
