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RBI cuts repo rate by 40 bps to 4%; Move Aimed at Increasing Credit Flow

The Reserve Bank of India (RBI) has reduced repo rate by 40 basis points to 4 per cent in an effort to further boost liquidity in the economy which has been reeling under the impact of COVID-19 induced countrywide lockdown.

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The Reserve Bank of India (RBI) has reduced repo rate by 40 basis points to 4 per cent in an effort to further boost liquidity in the economy which has been reeling under the impact of COVID-19 induced countrywide lockdown.

As a result, the reverse repo rate now stands at 3.35 per cent, said RBI Governor Shaktikanta Das.


The six-member monetary policy committee (MPC) voted 5:1 in favour of the decision. Repo rate is the rate at which a country's central bank lends money to commercial banks, and the reverse repo rate is the rate at which it borrows from them.


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