New Delhi: Setting aside concerns over the rupee’s depreciation, the Reserve Bank of India on Friday reduced the repo rate by 25 basis points to 5.25 per cent. This marks a shift from the six-quarter high of 8.2 per cent recorded in the second quarter of the current fiscal. The rate cut is expected to make housing, auto and commercial loans more affordable.
Announcing the fifth bi-monthly monetary policy for the fiscal year, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) unanimously decided to lower the short-term lending rate by 25 basis points. He said the decision was influenced by a favourable inflation outlook and stable economic conditions.
Retail inflation, measured by the Consumer Price Index (CPI), has remained below the government’s mandated 2 per cent threshold for the past three months.
The central bank also noted that the Indian economy recorded 8.2 per cent growth in the second quarter of 2018, reflecting sustained momentum in economic activity.
