The Reserve Bank of India (RBI) Friday slashed the repo rate by 0.25 percent from 5.40 per cent to 5.15 percent on Friday during its fourth bi-monthly policy review. This is the fifth cut in the repo rate by the RBI in 2019 to reduce borrowing costs for home and auto loans.
After the fall of first-quarter GDP growth rate to 5 per cent, the RBI has also slashed the GDP growth forecast for the current fiscal from its previous estimate of 6.9 percent to 6.1 percent.
RBI Governor Shaktikanta Das said that the centre’s measures will help in boosting private consumption and spur private investments. Indicating that monetary transmission has been spread out and incomplete.
” RBI maintains accommodative policy stance with a view to reviving growth,” he added.
“RBI marginally revised up retail inflation forecast to 3.4% for Q2, but retains estimates for H2 at 3.5-3.7 percent,” Das added.
The announcements issued by the six-member Monetary Policy Committee (MPC) came three days after the meeting. The rate cut comes at a time when the Indian economy is facing a slowdown since the fall in economic activity after the global financial crisis of 2008-09.