Repo Rate Will Be Cut by 25 Basis Points to 6.5% by RBI [ Current Affairs ]


Repo rate has been cut down by 25 basis points to 6.5 per cent from 6.75 per cent, with immediate effect by the Reserve Bank of India (RBI). In the first bi-monthly monetary policy review of the RBI for the 2016 - 17 fiscal the announcement in this regard was declared.

First bi-monthly monetary policy for the 2016 - 17 says

  • Repo rate:
  • The policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.75 % to 6.5 % has been reduced by the RBI.
  • It is the rate at which RBI offers to the financial system.
  • Cash reserve ratio (CRR):
  • RBI has unaffected CRR and kept it at 4.0 % of net demand and time liabilities (NDTL).
  • Reverse repo rate:
  • RBI has used to reverse repo rate under the LAF to 6%.
  • The banks can keep excess funds with the RBI is called Reserve repo rate.
  • The RBI also announced number of measures to smoothen liquidity supply so that banks can lend to the creative sectors.

- Published on: April 6, 2016