Reserve Bank of India (RBI) cut its policy interest rate. Lets Know more about it.
- On Tuesday, The Reserve Bank of India cut its policy interest rate to a 4 - 1/2 year low of 6.75%.
- It is deemed as bigger than expected move.
- By cutting 50 basis point to a four year low of 6.75%, the effect is that commercial banks to reduce their loan rates faster.
- This is the fourth cut rate since January 2015.
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RBI Policy Rates
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| Current | Previous | |
| Repo Rate | 6.75% (w.e.f. 29/09/2015) | 7.25% (since 02/06/2015) |
| Reverse Repo Rate | 5.75% (w.e.f. 29/09/2015) | 6.25% (since 02/06/2015) |
| Marginal Standing Facility | 7.75% (w.e.f. 29/09/2015) | 8.25% (since 2/6/2015) |
| Bank Rate | 7.75% (w.e.f. 29/09/2015) | 8.25% (since 2/6/2015) |
| CRR | 4% (w.e.f. 09/02/2013) | 4.25% (since 30/10/2012) |
| SLR | 21.5% (w.e.f. 03/02/2015) | 22% (since 09/08/2014) |
Key Features:
New RBI Monetary Policy is seems to be better because following are some areas in which reforms has been seeking:
- After changes in RBI's monetary policy Global Growth has moderated especially in emerging market economies (EMEs),
- Further global trade has deteriorated
- Increment in downside risks to growth.
- Slowing global trade volumes, depressed commodity prices, weakening currencies and capital outflows in EMEs.
- It is expected that Exports will be grown up.
- Reduce Inflation.
- GDP decrease from 7.6% to 7.4% due to slower global growth, lack of investment in the private sector and constraints in bank lending etc.
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