The Reserve Bank of India cut the benchmark interest rate by 0.25 percent for the second time in a row to bring interest rate to the lowest level in one year on softening inflation. The central bank, however, kept monetary policy stance at ‘neutral’.
In the second policy review under Governor Shaktikanta Das, the six-member Monetary Policy Committee voted 4:2 in favor of the rate cut. The benchmark interest rate was cut by 0.25 percent to 6 percent, a move that will result in a lower cost of borrowing for the banks that are expected to transmit the same to individuals and corporates.
The RBI had on February 7 had last cut interest rate to 6.25 percent from 6.5 percent. Last time the repo rate stood at 6 percent was in April 2018. The rate cut is in consonance of achieving the medium-term objective of maintaining inflation at the 4 percent level while supporting growth, RBI said in a statement.
with inputs from agencies.