RBI Cuts Interest Rates for the First Time in 5 Years
The Reserve Bank of India (RBI) has reduced its key repo rate for the first time in nearly five years to boost the economy. The RBI Monetary Policy Committee (MPC) has unanimously decided to cut the key rate by 25 bps from 6.5 per cent to 6.25 per cent, Sanjay Malhotra said this morning in his first key address after taking over as the RBI Governor.
The MPC, which comprises three RBI members and three external members, had last reduced the repo rate in May 2020 and had kept the rate unchanged in the last 11 policy meetings.
Mr Malhotra said the global economic backdrop remains challenging with global economy growing below historical average. High frequency indicators are suggesting resilience in global economy, he said, adding that the Indian economy is not immune to global headwinds, but it remains strong and resilient.
With receding expectations on the size and pace of rate cuts in the US, bond yields and the dollar have risen, he added
