NEW DELHI, Dec. 5– India’s central bank, the Reserve Bank of India (RBI), on Friday announced a reduction in repo rate by 25 basis points to 5.25 percent.
Repo rate is the rate at which the central bank lends money to commercial banks in the event of a shortfall of funds.
“After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, the Monetary Policy Committee (MPC) voted unanimously to reduce the policy repo rate under the liquidity adjustment facility (LAF) to 5.25 percent,” reads a statement issued by the RBI.
“Consequently, the standing deposit facility (SDF) rate shall stand adjusted to 5.00 percent and the marginal standing facility (MSF) rate and the Bank Rate to 5.50 percent.”
According to the RBI, the MPC also decided to continue with the neutral stance.
The MPC is a committee of the RBI that is responsible for fixing the benchmark interest rate in India. (Namibia Daily News/Xinhua)
