RBI Monetary Policy Committee Cuts Repo Rate to 6.25%
In News
What Happened
Why It Matters
Background
History & Context
What Changed
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Repo Rate: BEFORE it was maintained at 6.50 percent, NOW it has been reduced to 6.25 percent.
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Interest Rate Cycle: BEFORE the RBI held rates steady for nearly two years, NOW it has executed its first rate cut since May 2020.
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Growth Outlook: BEFORE the focus was on the current fiscal year's estimates, NOW the MPC has officially projected India's real GDP growth for FY26 at 6.7 percent.
Prelims Angle
NCERT Connection
Practice Questions
Q1
With Reference ToWith reference to the Monetary Policy Committee (MPC) and its policy tools, consider the following statements: 1. A reduction in the repo rate generally leads to a decrease in the cost of borrowing for commercial banks. 2. A 'neutral' policy stance means the central bank retains the flexibility to either increase or decrease interest rates depending on macroeconomic data. Which of the statements given above is/are correct?