RBI cuts repo rate by 25 bps

Reserve Bank of India (RBI) in its first bi-monthly monetary policy review on Tuesday cut the repo rate by 25 basis points (bps) to 6.5 per cent. With this move the rates stand at its lowest in more than 5 years. The Cash Reserve Ratio (CRR) remains unchanged at 4 per cent.

Most analysts had anticipated a further reduction, after RBI had cut its repo rate by 125 basis points last year; as also owing to the slowing down of inflation, and  the government’s 2016-17 budget policy, which has kept borrowing and spending under a check.