Repo Rate  

Dilip Chenoy, secretary-general, Federation of Indian Chambers of Commerce and Industry (FICCI) lauded the Reserve Bank of India's (RBI) decision to slash the repo rate and reverse repo rate and extension of the loan repayment moratorium. 

 RBI Governor Shaktikanta Das today (May 22) announced more measures to tackle the economic slump

In what comes as a massive relief for the common man, the RBI has announced a 3-month moratorium on EMIs to be paid across loans

The Gross Domestic Product (GDP) has been lowered marginally from 7% to 6.9% for the year 2019-20. The Reserve Bank of India has cut the repo rate by an unusual 0.35 percentage points to 5.40% in its third monetary policy review for the current financial year. Repo rate is the rate at which the RBI lends to banks.
 

The RBI reduced the key policy rate thrice with an aggregate reduction of 0.75 percentage points in the repo rate, the rate at which RBI lends to banks.

Repo rate is the rate at which RBI lends to its clients generally against government securities. Reduction in repo rate helps the commercial banks to get money at a cheaper rate

The Monetary Policy Committee (MPC) has said that the reduction in repo rate is to aid domestic growth and encourage private investments in the country.
 

The State Bank of India has initiated the linking of savings rate and short term loan interest rate to repo rate From May 1, 2019. This particular move will undoubtedly pave the way for better transmission of rates to borrowers in the long run for all kinds of loans.  

Governor Urijit Patel, who headed the policy-setting committee, proposed to take a pause after hiking the rates in its last two successive policy meetings

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