Reserve Bank of India (RBI) today cuts the Repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.5% in its first bi-monthly monetary policy review for the 2016-17 fiscal and kept the Cash Reserve Rate (CRR) unchanged.
Repo Rate is the rate at which banks borrow from the central bank. One basis point is one hundredth of a percentage point. The repo rate now stands at 6.5%, the lowest it has been since March 2011. With this, Home, auto and other loans are set to become cheaper.
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