New Delhi, August 2: The Reserve Bank of India (RBI) has taken a middle path as it has announced a cut of 25 basis points in policy rates. With this, the repo rate has come down to 6 per cent, whereas the reverse repo rate has come down to 5.75 per cent. After the announcement, loans will get cheaper, spurring demand. RBI said that it is keeping a close eye on inflation for future policy decisions.
It was expected that the Reserve Bank of India will cut its repo rate by 25 basis points to 6 per cent– which is the lowest since November 2010. This expectation was there due to the historic low in consumer inflation. The inflation was just 1.54 per cent in June. The policy rate was 6.25 per cent before this.