Reserve Bank of India, on Tuesday, have cut the repo rate by 25 bps to 6.25 per cent. The Monetary policy committe comprising 6 members voted 6-0 in the favour of the rate cut.
Highlights
* Repo rate cut by 0.25% to 6.25%, Reverse Repo at 5.75%
* Cash reserve ratio or CRR unchanged at 4%'
* Growth forecast at 7.6% for the current fiscal
* Normal monsoon to quicken growth momentum
* Inflation target remains 5% for March 2017, upside risk
* 6-member Monetary Policy Committee makes India's first collective interest rate decision
* All MPC members voted in favour of rate cut
* Foreign exchange reserve rose to all-time high of $372 billion by September
* Govt has announced measures to cool food inflation, which opened up space for rate cut
* Banks should cut lending rates as small savings rate has been lowered
* RBI Governor expects further downgrading of global growth
*To allow start-ups to raise up to USD 3 million ECB annually
* Next monetary policy on December 7.
* RBI's research department sees inflation at 5.3 pc in Jan-Mar 2017, from 5 per cent in the previous quarter
* Sees growth picking up to 7.9 pc in next year
* Pay Commission recommendations to spur price pressure
* Uncertainty around US elections, crude prices, global demand.