Mumbai: Reserve Bank of India (RBI) has given a pre-Diwali gift to the common man of the country. RBI on Friday cut the repo rate by another 0.25 per cent from 5.40 per cent to 5.15 per cent. It was announced by the RBI’s Monetary Policy Committee (MPC) and believes that this will complement the recent measures taken by the government to accelerate growth.
This was the fifth straight interest rate cut by the apex bank, and so far the total quantum of reductions is 1.35 per cent.
A repo rate cut allows banks to reduce interest rates for consumers and lowers EMIs on car loans, home loans, and personal loans.
Government has also taken note of the revised growth projections of the MPC at 6.1 per cent for 2019-20 along with growth projections made by other bodies including the IMF, ADB etc.
Government has further taken note of higher projection of headline inflation by MPC for 2019-20, which is within the band of 3-4 per cent and well within the target range.
A sharp slowdown in investment activity along with a continuing moderation in private consumption growth is a matter of concern and reduction in repo rate will aid in to boost the economy.
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