Zee Media Bureau
New Delhi: The Reserve Bank of India (RBI) on Wednesday morning announced a surprise cut in repo rate.
The central bank has slashed the repo rate by 25 basis points to 7.50 percent from 7.75 percent.The move comes days after Finance Minister Arun Jaitley unveiled the Union Budget 2015-16 in Parliament.
This is the second out of turn 25 basis point-cut after the first one in January.
The cash reserve ratio (CRR) of scheduled banks remains unchanged at 4 percent of net demand and time liabilities.
The marginal standing facility (MSF) rate and the bank rate has been adjusted to 8.5 percent with immediate effect. The reverse repo rate under the liquidity adjustment facility stands adjusted to 6.5 percent.
The government welcomed a surprise interest rate cut as good news for the economy that would not pose any inflationary risks.
Both the rate cut and last weekend`s annual budget were "consistent with non-inflationary growth", the finance ministry`s chief economic adviser Arvind Subramanian said.
“RBI rate cut will give a boost to economy, EMIs will also come down significantly,” Jayant Sinha, MoS for Finance said.
Consumer Price Index (CPI)-based inflation has stayed below six per cent for the past four months and with global oil crude oil prices, notwithstanding the recent spike, are expected to stay benign. Consumer prices rose an annual 5.11 per cent (2012 base) in January this year, compared with a 4.28-per cent increase in December 2014.
With Agency Inputs
