MPC slashes policy rate by 50 bps

The Monetary Policy Committee (MPC) has slashed the repo rate by 50 basis points (bps) to 5.5 per cent, a reduction that exceeded industry expectations. Additionally, the cash reserve ratio has been cut by 100 bps to 3 per cent. The Reserve Bank of India (RBI) has changed its policy stance to ‘neutral’. The inflation outlook for the year has been revised to 3.7 per cent. The rate cut is aimed at maintaining growth momentum.