RBI Monetary Policy: Repo rate cut, GDP forecast lowered
By: – Syed Ali Taher Abedi
As was widely anticipated, the Reserve Bank of India(RBI) today cut the repo rate or key lending rate by 25 basis points while maintaing an accommodative stance. This is the fifth consecutive rate cut by the apex bank this year, aggregating to 135 points.
The Monetary policy Committee (MPC) of the apex bank also cuts GDP growth forecast for the curreny fiscal year 2019-2020 to 6.1% from 6.9% earlier.
The apex bank governor had said that there is no reason to doubt the government’s commitment to maintain the fiscal deficit as given in the budget.
Eventually the Repo rate is likely to settle at 4.75 percent in this rate cut cycle. This is good news for the markets even though the markets are concerned about the issues in the NBFC and housing finance space,
The Governor said that it is not possible to comment where the RBI will take a pause on repo rate.
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