Repo Rate Cut to 5.40 Percent – RBI Policy

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RBI Monetary Policy

Repo Rate Cut to 5.40 Percent – RBI Policy

The Repo Rate for the banks has been reduced to 5.40 percent, cut by 35 basis points. As a result of the Monetary Policy Committee, the new Repo rate fell to 5.40 percent from the earlier 5.75 percent.

The Reverse Repo rate has been changed to 5.15 percent, while the Bank rate and MCLR ratio has also changed to 5.65 percent. The CRR (Cash Reserve ratio) stands at 4 % and SLR at 18.75 percent.

According to the RBI Policy, this rate cut has been announced due to Economic Slowdown and Inflation rate under the same circumstances. Trade war between US-China, Weakening of Industrial investment in the United States, Lack of growth in the Manufacturing worldwide and even the brexit of Britain have been attributed to Global factors.

Japan’s industrial figures shown that the economy is likely to slow in the second quarter of FY20. The RBI Policy has also mentioned the economic numbers are not favorable in the Emerging Countries.

Manufacturing and Sales were also fallen down in the most of the countries like as China, Russia and Brazil. This situation is likely to continue over for the next few quarters. If the crisis of the Automotive sector is corrected, then it will stimulate for the Country’s Economic growth.

Low rainfall, Weakening in Manufacturing and Housing Sector lead to slow growth domestically. Private Investment has not reached the required level. It is also estimated that the Country’s Inflation rate will be below 4 percent in the Current Fiscal year.

The Country’s economic growth (Gross Domestic Product) is expected to below 7 percent for the current fiscal. The said above Repo rate cut, which was seen as the lowest in the last Nine years.

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