RBI slashes repo rate by 25 bps
New Delhi/Mumbai, Jun.6 (HS): As expected the Monetary Policy Committee (MPC) today slashed the repo rate by 25 bps as the growth in the gross domestic product (GDP) moderated to a 21-quarter low in Q4FY19.
Meanwhile, the Committee also changed the stance to ‘Accommodative’. RBi finds sharp slowdown in investment activity along with a continuing moderation in private consumption growth a matter of concern.
RBI has said in its note that the headline inflation trajectory remained below the target mandated to the MPC even after taking into account the expected transmission of the past two policy rate cuts.
A rate cut generally is good for companies which are debt-laden (as it reduces interest cost), and banks as well as NBFCs as it brings down the cost of funds for them. At the same time for the real estate sector, a fall in repo rate may also mean lower EMIs, it may noted.
