The Reserve Bank of India (RBI) has cut the repo and reverse repo rate by 25 basis points each. The repo rate has been cut to 4.75 percent from the existing 5 per cent while the reverse repo has been cut to 3.25 per cent from the existing 3.5 per cent.
The CRR has been left untouched at 5 per cent in the annual policy review on Tuesday. The repo rate is the rate at which the central bank lends to banks while reverse repo is the rate at which it absorbs excess cash from the black money markets. The central bank last cut interest rates in early March.
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