Rajan cuts lending rate by 0.25%

Mumbai: Reserve Bank Governor Raghuram Rajan on Tuesday cut the key interest rate by 0.25 per cent, third time this year, meeting market and government expectations of boosting growth by lowering borrowing cost.

While the RBI cut the repo rate from 7.5 per cent to 7.25, it left all other policy tools like cash reserve requirement unchanged at 4 per cent and Statutory Liquidity Ratio (SLR) at 21.5 per cent.

Announcing the second bi-monthly monetary policy this fiscal, Rajan said that “with low domestic capacity utilisation, still mixed indicators of recovery, and subdued investment and credit growth, there is a case for a cut in the policy rate today”.

RBI had previously cut repo rate by 0.25 per cent each in January and March. .

PTI