RBI cuts policy repo rate in its 3rd bi-monthly Monetary Policy Statement for FY 20

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has recently announcement its 3rd bi-monthly Monetary Policy Statement for FY 20 (2019-20). In it, RBI reduced the policy repo rate under the Liquidity Adjustment Facility (LAF) by 35 basis points (bps) from 5.75% to 5.40% with immediate effect. Consequently, the reverse repo rate under the LAF stands revised to 5.15%, and the Marginal Standing Facility (MSF) rate and the Bank Rate to 5.65%. This is the 4th straight time that the RBI has cut interest rates. The move is said to give a fillip to the economy. The MPC, headed by Shaktikanta Das, also cut GDP growth target to 6.9% from 7% for the ongoing financial year.