The Reserve Bank of India cut the repo rate by 40 basis points to 4 percent from 4.40 percent and reverse repo to 3.35 percent from 3.75 percent.

RBI in a press release confirms a reduction in the repo rate to revive growth and mitigate the impact of COVID-19 on the economy.

RBI in a press release confirms a reduction in the repo rate to revive growth and mitigate the impact of COVID-19 on the economy.The Reserve Bank of India(RBI) on May 22, 2020, has announced its decision to reduce the policy repo rate by 40 basis points to 4.0 percent from 4.40 percent with immediate effect. These reductions in the repo rates by the RBI is undertaken for a second time in the year 2020 after an off-cycle policy review to counter the economic fallout from an ongoing nationwide lockdown to contain the spread of the COVID-19 disease. The reverse repo rate under the liquidity adjustment facility(LAF) stands reduced to 3.35 percent from 3.75 percent.

The Monetary Policy Statement(MPC) also decided to proceed with the accommodative stance as long as it is important to revive growth and mitigate the impact of COVID-19 on the economy while ensuring that inflation remains within the target.

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