NEW DELHI: The Monetary Policy Committee (MPC) of the Reserve Bank of India slashed the short-term lending rate, or repo rate, by 25 basis points to 6 per cent at its third bimonthly policy review. The MPC announced its decision on Wednesday afternoon.
The rate cut was in line with market expectations.
The Central Bank had last cut the policy rate in October 2016.
The MPC is headed by RBI Governor Urjit Patel.
Four of six MPC members, Dr. Chetan Ghate, Dr. Pami Dua, Dr. Viral V. Acharya and Dr. Urjit R. Patel were in favour of the monetary policy decision, while Dr. Ravindra H. Dholakia voted for a policy rate reduction of 50 basis points and Dr. Michael Debabrata Patra voted for status quo.
MPC, meanwhile, decided to keep the policy stance neutral and to watch incoming data.
The reverse repo rate has been adjusted to 5.75 per cent, and the marginal standing facility (MSF) rate and the bank rate to 6.25 per cent.
The projection of real GVA growth for 2017-18 has been retained at the June projection of 7.3 per cent, with risks evenly balanced.
CPI inflation stood at 1.54 per cent in June, lower than the Central Bank’s target range of 2-3.5 per cent during the first half of the financial year.