RBI Monetary Policy Highlights on 29th September 2015

RBI Monetary Policy Highlights on 29th September 2015: Reserve Bank Governor Raghuram Rajan on Tuesday cut the benchmark repo rate by 50 basis points to a four-year low of 6.75 per cent in a surprise move. Most analysts polled by Reuters expected the central bank to slash rates by 25 basis points. "The Reserve Bank has front-loaded policy action by a reduction in the policy rate by 50 basis points," Dr Rajan said in a statement.

RBI Monetary Policy Highlights on 29th September 2015:

• RBI reduce the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points from 7.25 per cent to 6.75 per cent with immediate effect;
• RBI keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liability (NDTL);
• RBI continue to provide liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term repos of up to 0.75 per cent of NDTL of the banking system through auctions; 
• RBI continue with daily variable rate repos and reverse repos to smooth liquidity.
• 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 7.75 per cent.
• GDP growth forecast for 2015-16 lowered to 7.4 %.