The Reserve Bank of India has once again cut key interest rates. The RBI has reduced the policy repo rate by 0.40%. With this cut, the repo rate has now come down to 4%. This information was given by RBI Governor Shaktikanta Das at a press conference on Friday. Das said that the Monetary Review Committee meeting was scheduled to be held from 3rd to June 5, but the Committee has already held a meeting and made important decisions. He said five out of six members of the MPC have agreed to the decision to cut the repo rate.
RBI Governor Das said that the MPC has also decided to reduce the repo rate as well as the reverse repo rate. The RBI has reduced the reverse repo rate from 3.75 percent to 3.35 percent. Earlier on March 27, the RBI cut the repo rate by 0.75 percent. At the same time, Das said that customers have been speeding up the benefit of cutting rates. By cutting the repo rate, banks can now also reduce their interest rates on loans. Here, the repo rate is the rate at which the central bank of the country lends to other banks.
The benefit of repo rate cuts can be extended to customers by reducing the burden of their loan EMI. Reducing the EMI burden can give people a little liquidity relief. Many people are currently facing a liquidity crunch due to the outbreak of the coronavirus and countrywide lockdown.
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