The Reserve Bank of India on Friday reduced a key interest rate for the fifth time in a row in an effort to stimulate a slowing economy even as it lowered the growth forecast for the current financial year.
The RBI lowered the repo or the repurchase rate by 25 basis points from 5.40 per cent to 5.15 per cent.
The repo rate is the rate at which RBI lends to commercial banks.
RBI Governor, Shaktikanta Das, said the bank’s monetary policy committee decided to continue with an “accommodative stance as long as it is necessary to revive growth while ensuring that inflation remains within the target’’.
The central bank also revised downwards its GDP growth outlook for 2019-2020 to 6.1 per cent from an earlier 6.9 per cent.
Modi, who was re-elected for the second term in May, faces daunting challenges to revive India’s sluggish economy amid concerns over a deepening agrarian crisis and unemployment.
India’s economy grew by just five per cent in the June quarter – marking the slowest pace of expansion for the economy since March 2013.
Edited by Fatima Sule/Abdulfatah Babatunde
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