Reserve Bank of India (RBI) Governor Shaktikanta Das while addressing the media on Friday announced that the Repo rate has been slashed by 40 basis points from 4.4 % to 4%. The Reverse repo rate has been reduced to 3.35%: and MSFand Bank rate has been cut down to 4.25%. In his last address on April 17, the RBI governor had slashed the reverse repo rate under liquidity adjustment facility (LAF) from 4% to 3.75%. The consecutive cut in the Repo rate - the rate at which the central bank lends money to banks - takes it to its lowest point ever, in an effort to get banks to pass on the benefit to consumers and spur the investment cycle.
#BREAKING | RBI's MPC cuts Repo rate by 40 basis points from 4.4% to 4%; MSF and Bank rate reduced to 4.25% and Reverse Repo rate reduced to 3.35%; Tune in to watch here - https://t.co/RZHKU3wOei pic.twitter.com/EfjITpoHkv— Republic (@republic) May 22, 2020
The RBI Governor's press brief is in regards to the central bank's own measures totalling an estimated Rs 8 crore of the Aatmanirbhar Bharat package. Along with that, Shaktikanta Das' address also comes ahead of the meeting of RBI’s monetary policy committee between June 3-5 where the committee is likely to announce its second bi-monthly policy of 2020-21 - though the regular cycle of monetary policy announcements has been altered this year, with the Governor announcing changes to key rates on two occasions amid the Covid crisis. The Finance Minister is also to meet the heads of PSU banks on Friday.
#LIVE | Central banks have to answer the call to the frontline to fight for the economy. Recent package announced called for a need for MPC meet ahead of schedule: RBI Governor Shaktikanta Das; Tune in to watch here - https://t.co/RZHKU3wOei pic.twitter.com/n9xdEMHUoz— Republic (@republic) May 22, 2020