RBI cuts repo rate by 25 bps to 5.75%, changes stance to accommodative

According to a Bloomberg Survey, 31 of 43 economists had projected 25 basis point rate cut while three penciled in a 50 basis points cut.

The monetary policy committee (MPC) of the Reserve Bank of India (RBI) on Thursday reduced the repo rate by 25 basis points (bps) to 5.75 per cent in the second bi-monthly monetary policy meet of the financial year 2019-20 (FY20), that concluded on Thursday. It was a third straight interest rate cut by the RBI. 

Repo rate is the rate at which the RBI lends money to the commercial banks, in case of any shortfall of funds. Consequently, reverse repo rate now stands at 5.50 per cent. The stance of the policy was also changed to 'accommodative' from 'neutral'. 

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