Banking News

RBI nicks REPO rate by 25 BPS

RBI nicks REPO rate by 25 BPS


Reserve Bank of India in its Press release on August,2,2017, Wednesday, said that the MPC in its third Bi-Monthly Statement for 2017-18,  decided  to  reduce  the  policy  repo  rate  by  25  basis  points.  With the above monetary policy decision of reducing the policy rates, the repo rate (the rate at which banks borrow funds from the RBI) stays at 6.00 per cent.

With the above monetary policy decision of  Apex Bank to reduce the policy rates, the repo rate (the rate at which banks borrow funds from the RBI)  now stays at 6.00 per cent.

The key policy rates:

CRR (Cash Reserve Ratio)   4.00%
SLR  (Statutory Liquidity Ratio)

  • *W.e.f June 24, 2017:
20% *
Repo Rate   6.00%
Reverse Repo Rate   5.75%
MSF Rate (Marginal Standing Facility Rate)   6.25%
Bank Rate   6.25%

It is informed in the RBI’s Press Release that the six members Monetary Policy Committee (MPC) has taken neutral stance in  view of consonance with the objective of achieving the medium term target for consumer price index (CPI) inflation of 4% within a band of +/- 2 %, while supporting  growth.Though  MPC  noted  that  some  of  the  upside  risks  to  inflation  have  either  reduced  or  not materialised  the baseline path of headline inflation excluding the HRA impact has fallen below the projection made in June to a little above 4 per cent by Q4 which has necessitated them to reduce the policy rates by 25BPS.
Related articles:

Different types of repos in money market

Do you know that Repo auction frame work is different from Repo rate

How RBI monitors money circulation in India?
What is bank rate?
Effects of Repo Rate, Reverse Repo rate changes
What is Marginal Standing Facility (MSF)?

CRR and SLR: How they affect on bank credits?

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