BREAKING: RBI cuts Repo Rate by massive 75 bps to 4.4% to revive growth amid Coronavirus

The Reserve Bank of India (RBI) announced a 'sizeable reduction' in the policy repo rate of the country, slashing it by 75 base points to 4.4%, RBI governor Shaktikanta Das announced on Friday. Addressing the media via a video conference, the RBI governor revealed that the Monetary Policy Committee (MPC), which preponed its meeting, voted in a majority of 4:2 to have a sizeable deduction in the policy repo rate. The reverse repo rate was slashed by 90 base points to 4%.  

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The latest rate cut is by far the biggest by the central bank among a series of cuts that have been a highlight of Shaktikanta Das' tenure as Governor. However, the latest measure, which has come as an emergency measure and not within the RBI's bi-monthly policy-review framework, is three times the size of the cut generally applied.

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Repo rate slashed

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This comes after minutes after influential Moody's Investors Service slashed India's 2020 GDP growth projection from its earlier forecast of 5.3% to 2.5% amid the global Coronavirus pandemic. The Indian government had earlier projected GDP growth at 5% in 2019-20 as compared to 6.1% in 2018-19. Q3 had witnessed a 4.7% growth. India has announced a Rs 1.7 lakh crore Coronavirus relief package, split between assuring food security and Direct Benefit Transfer cash-transfer as the country observes a 21-day lockdown to combat COVID-19, of which over 700 infections have been confirmed thus far.

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