The Reserve Bank of India (RBI) on Friday lowered the repo rate by 25 basis points – or 0.25 percentage point - to 5.15 per cent with immediate effect. The RBI's move was in line with the expectations of most economists. The central bank's Monetary Policy Committee maintained an “accommodative” stance, which rules out any increase in the key interest rates for now. All but one member of the Committee - chaired by Governor Shaktikanta Das - voted to reduce the key rate by 0.25 percentage point whereas the decision on policy stance was unanimous, the central bank said in its fourth bi-monthly statement of the current financial year. The RBI Governor said the central bank will continue with the accommodative stance "as long as growth momentum stays as is and till growth is revived". Economists read the commitment to remain accommodative for as long as necessary to push growth as a strong signal of further monetary easing. The RBI has now cumulatively lowered interest rates by 135 bps this year, but said that "transmission has remained staggered and incomplete". (Also read: Rate-sensitive shares gain ahead of RBI monetary policy decision)
Here are highlights of the RBI's fourth bi-monthly monetary policy review of the current financial year (2019-20):
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