RBI Monetary Policy June 2019: The six-member RBI’s monetary policy committee (MPC) led by governor Shaktikanta Das cut the repo rate to 9-year low as demand slowdown, liquidity crunch weighed on central bank’s mind. The committee cut repo rate by 25 bps to 5.75 per cent and also changed policy stance to accommodative from neutral. The reverse repo rate under the LAF stands adjusted to 5.50 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.0 per cent. This is the third meeting under RBI governor Shaktikanta Das, who took charge in December 2018, and the first meeting of FY20. In April, the MPC had cut repo rate by 25 basis points to 6 per cent. The decision would be announced at 11:45 pm today.
The meeting comes at a time when India’s Q4FY19 GDP growth rate reduced to 5.8 per cent, a five year low under the Modi government. Even though inflation has remained very much under control, the liquidity had been in deficit mode for the past few months. The RBI is expected to come up with more measures to tackle the issue. The RBI has already cut rates two times this year.