According to sources from mumbai Slashing benchmark lending rates for the third time this year, the Reserve Bank of india cut its repo rate by 0.25% on Thursday and said its future monetary policy stance will be more accommodative. Meanwhile amid concerns of a slowdown in the economy, the central bank lowered its gross domestic product (GDP) forecast to 7% for the current fiscal from 7.2% predicted earlier.
Furthermore the repo rate, at which the central bank lends to the system, will come down to 5.75% after the cut. Meanwhile marginally increasing its inflation projection to 3-3.1% for the first half of the fiscal year 2019-20, which is within the comfort range of 2-6% set by the government, RBI cut the GDP growth targets sharply to 7% for FY20 on weak global scenario and dip in private consumption.
The policy resolution read "The MPC (monetary policy committee) notes that growth impulses have weakened significantly and a sharp slowdown in investment activity along with a continuing moderation in private consumption growth is a matter of concern”.
