In a major policy shift, the six member monetary policy committee (MPC) headed by Governor Shaktikanta Das on Thursday lowered the repo rate by 25 basis
points to 6.25 per cent in a 4-2 vote. RBI has thus cut rate for the first time in 17 months.
The last rate cut happened in August 2017. The MPC also changed the policy stance to ‘neutral’ from ‘calibrated tightening’. This was first money policy review for the former economic affairs secretary, who took over as RBI Governor in the second week of December 2018.
In post-policy interaction with media, Das said that shift in stance to neutral provides flexibility to meet growth challenges. “Farm output was expected to decelerate in FY19. Continuing deflation in food and crude led to decline in headline inflation,” he added.