The Reserve Bank of India today cut repo rate for the fourth time this year as inflation remained well below RBI’s expectations. The RBI’s monetary policy committee, led by Governor Shaktikanta Das, lowered by 35 basis points to 5.4%. Majority were expecting the RBI to cut its benchmark repo rate by 25 bps.
The RBI also lowered the GDP growth rate for 2019-20 lower to 6.9%, as compared to the earlier estimate of 7%.
The last time RBI made so many back-to-back rate cuts was during the 2008 financial crisis.
Repo rate is the rate of interest the banks pay when they borrow from the central bank. With falling repo rates, loan EMIs are also expected to come down.