RBI cuts repo rate by 25 bps in 4th Bi-monthly Monetary Policy Statement

The Reserve Bank of India (RBI) in its fourth bi-monthly monetary policy review for year 2016-17 has cut the repo rate by 25 basis points to 6.25%.
This monetary policy decision was taken by the newly constituted Monetary Policy Committee (MPC).  This was also Urjit Patel’s maiden monetary policy announcement as RBI Governor.
All the six members of MPC unanimously decided to cut key policy rate with the aim of achieving a midterm inflation target of 4% within a band of plus or minus 2%. With this, RBI moved away from tradition of RBI governor having the final say on monetary policy decisions.
Policy Rates

  • Repo rate under the liquidity adjustment facility (LAF): Reduced by 0.25 basis points to 6.25 percent.
  • Reverse repo rate under the LAF: It was adjusted to 5.75 per cent.
  • Marginal standing facility (MSF) and Bank Rate: It was adjusted to 6.75 per cent.
  • Reserve Ratios Cash Reserve Ratio (CRR) of scheduled banks: Unchanged at 4.0 per cent of net demand and time liability (NDTL).
  • Statutory Liquidity Ratio (SLR):20.75 per cent.



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