RBI reduces repo by 25 basis points from 7.5% cent to 7.25%

Second Bi-Monthly Monetary Policy Statement, 2015-16

The RBI in its second bi-monthly Monetary Policy Statement, 2015-16, reduced the policy repo rate. The policy repo rate, at which it lends to the scheduled banks borrowing for short liquidity gaps, under the liquidity adjustment facility (LAF) was reduced by 25 basis points from 7.5 per cent to 7.25 per cent with immediate effect. Meanwhile, it kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL). Also the central bank will continue to provide liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term repos of up to 0.75 per cent of NDTL of the banking system through auctions and will continue with overnight/term variable rate repos and reverse repos to smooth liquidity.

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