The Reserve Bank of India (RBI) on Wednesday cut the key repo rate by an unprecedented 35 basis points to 5.4 percent on August 7. This is the fourth straight repo rate cut since Shaktikanta Das took over as the governor in December 2018. The Monetary Policy Committee's move comes as the country battles economic slowdown, trade wars, and low inflation.
Here are the key takeaways from RBI MPC statement:
Policy rates
- Repo rate cut by 35 bps to 5.40 per cent
- Reverse repo rate adjusted to 5.15 per cent
- MSF and bank rate revised to 5.65 per cent
- Four MPC members voted for 35 bps cut and two voted for a 25 bps cut
- Policy stance maintained at accommodative
Growth forecast
- FY20 GDP forecast cut to 6.9 percent from 7 percent
NBFCs get a leg up
- RBI has taken measures to enhance credit flow to NBFCs
- Exposure of banks to each NBFC raised to 20 per cent of bank Tier-I capital
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