RBI cuts Repo rate by 25bps to 6.0%, the lowest since November 2010

The Reserve Bank of India (RBI) slashed its benchmark interest rate (Repo rate) on Wednesday by 25bps to 6%, hitting a more than 6-1/2 year low after inflation slumped. 

The reverse repo rate under the liquidity adjustment facility (LAF) stands adjusted to 5.75%, and the marginal standing facility (MSF) rate and the Bank Rate to 6.25%.

The statement read: “The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.”

Meanwhile, USD/INR drops further to hit the lowest levels since Aug 2015 at 63.69, as the Indian National Rupee (INR) remains largely unfazed by the RBI rate cut decision, which was widely priced-in by markets.