The Reserve Bank of India on Thursday cut the repo rate by 25 basis points to 6 per cent from 6.25 per cent.
The cut in repo rate had been anticipated by experts. The RBI was expected to aim at boosting economic activities amid fears of a global slowdown impacting domestic growth prospects. In February, the RBI had cut the repo rate by 25 basis points; this was the first such cut after a gap of 18 months.
The two back-to-back cuts in repo rate are expected to provide relief to borrowers in election season. The cut in repo rate came following a meeting of the six-member Monetary Policy Committee (MPC) of the RBI.
After the meeting, the RBI announced it expected the GDP to grow at 7.2 per cent in 2019-20. The RBI also revised the retail inflation forecast downwards to 2. 4% in Q4 of 2018-19, 2.9-3.0 per cent in first half of 2019-20 and 3.5-3.8 per cent in the second half, assuming a normal monsoon.
(With inputs from Nachiket Kelkar)
