RBI cut brings repo to lowest level since 2010

The Reserve Bank, in its second bi-monthly monetary policy review, announced the third consecutive rate cut, dragging the repo rate to its lowest level since July 2010.

In its meeting concluded on Thursday, the central bank announced a rate cut of 25 basis points to 5.75% from the existing 6%.

The last time repo rate was lower than this was way back in July 2010, when it stood at 5.50%.

The RBI's MPC voted unanimously in favour of a rate cut, with Chetan Ghate and deputy governor Viral V Acharya yet again dissenting in favour of holding on to the rates.

Repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds.

With this, the reverse repo rate has also been revised to 5.5% from 5.75%.

The central bank has also changed the stance from the existing neutral to accommodative.

However, the bank has lowered the growth of the target to 7.0% from existing 7.2% for FY20.

The central bank also maintained the CPI inflation target at 2.9-3.0% in H1:2019-20.