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In a much anticipated move, the apex bank cut down on the already existing REPO Rate
of 6.75% by 25 basis points to 6.50%. However, there was an additional surprise sprung
in the form of increased Reverse REPO of 6%. Earlier the Policy Rate Corridor stood at
+/- 100 bps but now has been reduced to +/- 50 bps as a result of decreased Marginal
Standing Facility rate by 75 bps. So, as of now, the key rates stand as REPO rate at 6.5%,
Reverse REPO at 6.0%, CRR at 4.0% and SLR at 21.5%. This clearly shows that the RBI
has provided further cushion to the banks in order to decrease their lending rates which
could not be achieved on notable terms in the previous financial year even after multiple
rate cuts.
Industry Reacts
lend to RBI at a higher rate thus increasing their profits on a twofold basis. This will help
lower the prevalent lending rates in the market.