RBI Monetary Policy: MPC cuts repo rate by 25 basis points, home and auto loans to be cheaper now - All you need to know
The Reserve Bank of India (RBI) on Friday announced the fourth bi-monthly monetary policy for 2019-20, after a three-day meeting. The The six-member Monetary Policy Committee (MPC) cut the repo rate by 25 basis points. According to latest updates, RBI cut repo rate from 5.40% to 5.15%. Moreover, reverse repo rate adjusted to 4.90% and bank rate at 5.40 %, accordingly. And, with this big development, the prediction by Zee Business comes true!
RBI Governor Shaktikanata Das after the repo rate cut announcement highlighted the fact that the MPC was one in its desire to get the economy moving forward. He said, "All five MPC members supported the cut, they voted unanimously to slash the repo rate by 25 basis points". Governor Das added, "There is a dearth in demand in rural and urban areas, but things have improved in agriculture sector."
Governor Das also said, "In August, there has been marked uncertainty global economy." Noteworthy, this is the fifth time in a row when RBI has slashed interest rates. Moreover, with cut in repo rates, home loans and auto loans are set to become cheaper.
As far as economic growth is concerned, Governor Das said, "FY20 Q2 GDP growth is expected to come in at 5.3%. RBI will take strong steps to deal with situation".
Refuting all reports of any shortage in funds in the system, Governor Das said, "Since August-September, there is no shortage in liquidity at all."
— Zee Business (@ZeeBusiness) October 4, 2019
Earlier in the day, equity benchmark BSE Sensex jumped over 250 points in early trade on Friday, driven by gains in banking and financial stocks ahead of the Reserve Bank's bi-monthly policy review. The 30-share index was trading 258.60 points, or 0.68 per cent, higher at 38,365.47. Similarly, the broader NSE Nifty spurted 70.00 points, or 0.62 per cent, to 11,384.00.
Top Sensex gainers in early session include Yes Bank, IndusInd Bank, SBI, Vedanta, HDFC, Hero MotoCorp, Tata Steel, and HDFC Bank, rising up to 5.52 per cent.
Losers in the pack were Tata Motors, M&M, Bharti Airtel, HCL Tech, PowerGrid, L&T, and ICICI Bank, falling up to 1.18 per cent.
In the previous session on Thursday, the BSE barometer ended 198.54 points, or 0.52 per cent, lower at 38,106.87, while the Nifty fell 46.80 points, or 0.41 per cent, to close at 11,313.10.
Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 810.72 crore on Thursday, exchange data showed.
The rupee, meanwhile, strengthened by 5 paise against its previous close to trade at 70.82 in early session.
Elsewhere in Asia, bourses in Hong Kong, Korea and Japan were trading on a weak note, as investors await US jobs data scheduled to be released later in the day, after a series of weak figures this week, which triggered concerns over the global economy.
Chinese markets are closed for the holiday week.
However, US markets on Thursday ended higher on rate cut expectations.
Brent futures, the global oil benchmark, rose 0.36 per cent to USD 57.92 per barrel.