For fifth time in a row, the Reserve Bank of India (RBI), in its fourth Bi-Monthly Monetary Policy Statement 2019-20, has cut the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points (bps) to 5.15% from 5.40% with immediate effect. The rate cut came much in line with market expectations. Consequently, the reverse repo rate under the LAF reduced to 4.90%, and the marginal standing facility (MSF) rate and the Bank Rate to 5.40%.
The Monetary Policy Committee (MPC) of RBI also decided to continue with an accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target. Besides, RBI has revised real GDP growth for 2019-20 downwards to 6.1% from 6.9%.