India Monetary Policy


Central Bank cuts rates for the first time in three years

At its last policy meeting on 17 April, the Reserve Bank of India (RBI) cut the repo rate by 50 basis points to 8.00% and the reverse repo rate also by 50 basis points to 7.00%, in a decision that surprised the market, which had anticipated a 25 basis-point cut. The Bank left the cash reserve ratio unchanged at 4.75%. The decision marks the first interest rate cut since April 2009. According to the Central Bank, the decision to cut interest rates is justified within the context of a slowdown in economic growth which, in turn, is contributing to a moderation in core inflation. The Bank, however, added that


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Note: Reserve Bank of India (RBI) Repo Rate in %.
Source: Reserve Bank of India (RBI).

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