RBI cuts key lending rate to 6%

Mumbai (IANS) In the first monetary policy review of the current fiscal, the Reserve Bank of India (RBI) on Thursday lowered its key lending rate for commercial banks by 25 basis points (bps) to 6 per cent.

"On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6 per cent from 6.25 per cent with immediate effect," the RBI said.

"Consequently, the reverse repo rate under the LAF stands adjusted to 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.25 per cent."

The MPC also decided to maintain the neutral monetary policy stance.

"These decisions are 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."