Published: Fri, June 07, 2019
Markets | By Otis Pena

Will RBI's repo rate cuts help with India's economic slowdown?

Will RBI's repo rate cuts help with India's economic slowdown?

Here are all the live updates on the RBI's Monetary Policy Committee meet announcement. Maintaining an accomodative stance on the monetary policy, all the 6 members of the MPC unanimously voted in favour of the rate cut. This might be a sigh of relief for common man as loans are expected to get cheaper.

The move is expected to lead to reduction of lending rate by banks leading to lower EMI for housing, vehicle loan and corporate borrowers.

Banking and finance experts hailed the RBI's decision to cut the short-term lending rate, terming it as a step in right direction that could help stimulate consumer demand.

"A sharp slowdown in investment activity along with a continuing moderation in private consumption growth is a matter of concern", the bank's monetary policy committee (MPC) said in a statement after making its third cut since February. RBI also hinted at more cuts by changing its policy stance from "neutral" to "accommodative".

Despite the RBI cutting policy rate by 50bp so far in 2019, banks have not adjusted their lending/deposit rate accordingly. A repo rate cut allows banks to reduce interest rates for consumers on loans, and lowers equal monthly instalments on home loans, auto loans and personal loans.

With the current rate cut, RBI so far has reduced 75 bps this year. This will be more comforting for the market than just a rate cut, especially in light of the slowdown. The economy expanded at a 6.8% pace during the last fiscal year, a five-year low. "The RBI is now keen on looking to improve the growth trajectory since the ongoing liquidity crisis has hurt the cost of borrowings, and further stressed the system", Mustafa Nadeem, CEO, Epic Research.

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NY hasn't had ace right-hander Luis Severino all season, and James Paxton and CC Sabathia each spent time on the disabled list. Keuchel , the 2015 American League Cy Young Award victor , compiled a 76-63 record in seven seasons with the Astros.

These projects were referred by a consortium of lenders including the Power Finance Corp to the NCLT as per the provisions of the February 12 RBI circular, which said it would be mandatory for projects in default to be referred to the NCLT after 180 days from start of the resolution period.

PM: "RBI has gone for a rate cut for the third consecutive time and changed its stance from neutral to accommodative".

PM: Liquidity in the system turned into an average daily surplus of Rs 66,000 crore in early June after remaining in deficit during April and most of May due to restrained government spending, says the RBI. The RBI did not announce any big bang liquidity measure. The inflation outlook for the back half of the fiscal year in March was put at 3.4-3.7%, down from an earlier projection of 3.5-3.8%.

PM: The RBI has made a decision to do away with charges levied on RTGS and NEFT transactions, banks will be required to pass this benefit to their customers.

A security guard's reflection is seen next to the logo of the Reserve Bank Of India (RBI) at the RBI headquarters in Mumbai, India, June 6, 2019. Committee to submit its recommendations within two months of its first meeting.

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