RBI Slashes Repo Rate by 25 Points

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In order to give a boost to Indian Economy, Repo Rate has been slashed from 6.5% to 6.25% and Reverse Repo Rate has similar effect coming down to 5.75% from 6.0%. This rate cut will result in lowering of Home Loan, Vehicle Loan and other Corporate Loans, provided the Banks pass on this cut to the borrowers. While announcing the rate cut after conclusion of first six members ‘Monetary Policy Committee’, new RBI Governor Mr. Urjit Patel, said that overall situation of Indian Economy was satisfactory. A 7.6% GDP growth is expected in the current fiscal year and next year’s outlook is also positive. All the six members were unanimous in deciding the rate cut. RBI has cut these rates six times since January, 2015.

It is expected that Inflation rate shall remain below 5% and may further come down in the next fiscal. Food production this fiscal year has a good impact on the food inflation. Financial Sector including the Equity Markets have welcomed the rate cut, Sensex closing 91 points higher and NIFTY ending with a gain of 31 points.

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