The minutes of the Monetary Policy Committee reveal how its six members read the state of the economy. But is a repo rate cut enough, and how will linking repo rate to lending and deposits rates impact people?
In its first meeting in FY'20, the Monetary Policy Committee (MPC) of the Reserve Bank of India, headed by Governor Shaktikanta Das, Wednesday cut the key lending rate — repo rate — by 25 basis points from 6.25 per cent to 6 per cent.
In the last MPC meeting held on August 1, five out of the six members voted for a 25 basis points increase in the Repo rate to 6.50 per cent and for retaining the Reserve Bank of India’s neutral policy stance amid various uncertainties on the growth and inflation fronts.
The RBI cut the Repo rate by 25 basis points to a six-year low of 6 per cent on August 2, but kept its policy stance at “neutral”. Four MPC members, including Urjit Patel and Viral Acharya, voted for 25 basis points cut, while Ravindra Dholakia voted for a 50 bps cut.