RBI cuts key interest rate by 0.25 percent

Q.  RBI cut the key interest rate by what percent?
- Published on 06 Apr 16

a. 0.25
b. 0.75
c. 0.55
d. 0.35

ANSWER: 0.25
 
A host of measures have been introduced to smoothen liquidity supply so banks can follow productive sectors for lending and have an accommodative stance going ahead
  • Weak private investment in face of low capacity utilisation has spurred the need for a reduction in policy rate by 0.25 percent and introduced a host of measures to smoothen liquidity supply
  • RBI’s repo rate or the rate at which it lends to the financial system has come down to 6.5 percent- this cut is in line with expectations as the stock market has reacted, however the BSE Sensex was down 300 points
  • A host of measures were also taken on the liquidity front with the narrowing of the policy rate corridor to 0.50 percent from earlier 1 percentage point.

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