RBI forecasts economic contraction, announces a sharp 40-bp rate cut

The six-member MPC also kept policy stance unchanged at 'accommodative' for "as long as necessary" to revive growth

Projecting a contraction in growth for the current fiscal year, the Reserve Bank of India (RBI) on Friday went for a further cut of 40 basis points in the policy repo rate even as it warned that inflation, particularly in food, is on the rise again.

The repo rate is the rate at which banks borrow from the RBI. 

The six-member monetary policy committee (MPC) kept the policy stance unchanged at “accommodative” “as long as necessary” to revive growth. “It is in the growth outlook that the MPC judged the risks to be gravest,” RBI Governor Shaktikanta Das said in an online