RBI cuts repo rate by 25 bps, CRR unchanged

Moneycontrol Bureau 

In its mid quarter (Jan-March) monetary policy the Reserve Bank of India (RBI) on Tuesday cut the policy or repo rate by 25 basis points to 7.50%. Accordingly, the reverse repo came down to 6.50%. The policy action was in expected lines.

Repo is the rate at which banks borrow short-term money from the central bank. Banks park excess money with RBI through reverse repo window.

Credit rating agency Moody's Investors Service said rising food inflation is a negative for India's sovereign rating and may hurt government finances and monetary policy flexibility. The wholesale price inflation for food stood at 11.4% in February.