{"id":25360,"date":"2019-10-06T11:30:07","date_gmt":"2019-10-06T06:00:07","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=25360"},"modified":"2019-11-04T14:35:51","modified_gmt":"2019-11-04T09:05:51","slug":"reduction-in-the-repo-rate-for-the-fifth-time-by-the-rbi","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/reduction-in-the-repo-rate-for-the-fifth-time-by-the-rbi\/","title":{"rendered":"Reserve Bank of India Reducted in the Repo Rate for the Fifth Time by the"},"content":{"rendered":"

The\nReserve Bank of India reduced the policy Repo Rate for the fifth time in a row.\nThe body took this step contemplating the country’s current economic\nconditions. Therefore, the RBI aims to transform the current macroeconomic\nsituation of India by making necessary changes via the Monetary Policy\nCommittee.   <\/p>\n\n\n\n

What\nis Repo Rate and Reverse Repo Rate?<\/h2>\n\n\n\n

The most crucial difference between the two is that the Repo rate is the interest rate at which RBI lend loans to Commercial Banks. While reverse repo rate is the rate at which the Reserve Bank of India<\/strong>[1]<\/a><\/sup> borrows loans from the Commercial Banks. Additionally, the Repo rate is always higher than the reverse repo rate. <\/p>\n\n\n\n

RBI’s Rate\nCut Action Plan<\/h2>\n\n\n\n

The Monetary Policy Committee announced on Friday, the fifth consecutive rate cut to support the measures taken by the government, such as reduction of corporate tax, to accelerate economic activity. The committee of experts with the aim to boost the economic activity amid benign inflation reduced the repo rate by 25 Basis<\/a> points to 5.15% from 5.40%. Also, the reverse repo rate has been reduced to 4.9%. However, the minority expected a 40 Basis point cut. <\/p>\n\n\n\n

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RBI’s Outlook\non Growth <\/h2>\n\n\n\n

The\nMonetary Policy Committee projected India’s Gross Domestic Product {GDP} at\n6.9% for the financial year 2019- 20. Also, in the first quarter, the growth\nnumber slipped to 5%, which was the weakest in six years.  The projection of growth shows that the rate\nwill decrease for the fiscal year 2019 – 20 from 6.9% to 6.1%. Also, the\ncommittee concluded that the reduction in growth rate is due to the weak\ndomestic demand and sagging export prospect on account of the ongoing trade\ntensions. <\/p>\n\n\n\n

Furthermore,\nthe MPC stated that “Accommodation stance will be maintained as long as it is necessary\nto revive growth while ensuring that inflation remains within the target.”  This statement ensures room for more rate\ncuts in the future. <\/p>\n\n\n\n

At the meeting, five out of six members voted in favor of rate cut by 25 basis points rather than a rate cut by 40 basis points. On the other hand, the MPC has retained its consumer price inflation forecast for the second half of the financial year 2019- 2020 which is expected at 3.5% to 3.7%.<\/p>\n\n\n\n

Final Words<\/h2>\n\n\n\n

The Monetary Policy Committee stated that their decisions are in consonance with the agreement to achieve the medium-term target for the consumer price index {CPI} inflation of 4%. Also, the body is ensuring the range of this inflation within the band of plus-minus 2%, while supporting the growth. <\/p>\n\n\nPR86610CEA88E0A534A06B37B56D2BB83E102
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Also, Read:<\/b> Loan Mela’s for NBFCs; Govt. Attempts to Boost Liquidity<\/a><\/mark>.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

The Reserve Bank of India reduced the policy Repo Rate for the fifth time in a row. The body took this step contemplating the country’s current economic conditions. Therefore, the RBI aims to transform the current macroeconomic situation of India by making necessary changes via the Monetary Policy Committee.   What is Repo Rate and Reverse […]<\/p>\n","protected":false},"author":17,"featured_media":25362,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2620],"tags":[567,967,495],"acf":{"service_id":"220"},"yoast_head":"\nReduction in the Repo Rate for the Fifth Time by the Reserve Bank of India<\/title>\n<meta name=\"description\" content=\"The Reserve Bank of India reduced the policy Repo Rate for the fifth time in a row to contemplate the economic conditions of India.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/reduction-in-the-repo-rate-for-the-fifth-time-by-the-rbi\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Reduction in the Repo Rate for the Fifth Time by the Reserve Bank of India\" \/>\n<meta property=\"og:description\" content=\"The Reserve Bank of India reduced the policy Repo Rate for the fifth time in a row to contemplate the economic conditions of India.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/reduction-in-the-repo-rate-for-the-fifth-time-by-the-rbi\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2019-10-06T06:00:07+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-11-04T09:05:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/Rapo-rate-reduction.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Tanya Verma","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/07\/IMG-20190703-WA0001__01.jpg","authorDescription":"Tanya is working as writer & editor from past 2 years with experience in covering startup and technology related topics.","postViews":448,"readingTime":2,"nextPost":{"id":25358,"slug":"prohibition-on-acceptance-of-deposit-from-public"},"prevPost":{"id":25347,"slug":"how-to-set-up-a-packaged-drinking-water-plant"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/Rapo-rate-reduction.jpg","postTerms":"RBI Notification","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/25360"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=25360"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/25360\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/25362"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=25360"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=25360"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=25360"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}