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RBI reduces interest rate by giving Diwali gift


New Delhi, Oct 04.(HS): The Reserve Bank of India has given Diwali gifts to the people by
cutting interest rate. The Reserve Bank presented a review of monetary policy
on Friday. In this, the repo rate has been cut by 25 basis points i.e. up to
quarter percent. 

The repo rate has now come down to 5.15 percent. After
reducing the repo rate, banks will also reduce the interest rate and the EMI of
people's home loan, auto loan etc. will be reduced.

With this,
the Reserve Bank has also reduced the GDP growth estimate to 6.1 percent in
this financial year. The Reserve Bank has cut interest rates for the fifth
consecutive time in the year 2019. So far this year, the interest rate has been
cut by 1.35 percent. It is expected that banks will extend its benefits to
customers before Diwali. 

Along with this, the reverse repo rate i.e. the
interest that the banks get in keeping the funds with the Reserve Bank, has
also been reduced to 4.90 per cent.

The Reserve
Bank's Monetary Policy Committee (MPC) has decided that until such time as
growth improves, such relief measures should be taken, but the focus will be on
keeping inflation within target. Significantly, the Reserve Bank has set a
target of keeping the consumer price-based inflation at 4 percent in the medium
term. All members of the MPC voted in support of the rate cut.