The Reserve Bank on Friday cut its key rates by 0.25 percent to boost economy from six-year low saying reduction was necessary to revive growth.
With first-quarter GDP growth plunging to 5 percent, the RBI cut its estimate of economic growth in the current fiscal to 6.1 percent from its earlier estimate of 6.9 percent.
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The repo rate, at which it lends to the system, has been brought down to 5.15 percent to help reduce borrowing costs for home and auto loans, which are now directly linked to this benchmark.
This is the fifth straight cut in rates by the Reserve Bank in its key rates in as much policy reviews in 2019, and takes the total quantum of reductions to 1.35 percent.
Following are the highlights of the RBI's fourth bi-monthly monetary policy statement of 2019-20:
- It is fifth-rate cut in 2019;
- GDP growth forecast lowered for current fiscal to 6.1 percent from 6.9 percent earlier;
- RBI continues with its accommodative monetary stance to revive economic growth;
- Government stimulus measures to help strengthen private consumption and spur investments;
- Continuing slowdown warrants intensified efforts to restore growth momentum;
- Retains retail inflation projection for second half of year at 3.5-3.7 percent;
- RBI notes monetary transmission has been staggered and incomplete;
- Foreign exchange reserves stood at $434.6 bn on 1 October, up $21.7 bn over March-end 2019;
- All members of rate-setting Monetary Policy Committee (MPC) voted for rate cut;
- Next monetary policy review meet scheduled during 3-5 December, 2019.
(With PTI inputs)