Repo rate cut: RBI MPC trims benchmark lending rate further by 40 bps to 4%

RBI Governor Shaktikanta Das on May 22 announced 40 basis points cut in repo rate to 4 percent. Accordingly, the reverse repo rate stands adjusted to 3.35 percent.

Repo is the rate at which RBI lends funds to commercial banks when needed. It is a tool that the central bank uses to control inflation.

"The monetary policy committee (MPC) has voted 5:1 to reduce policy repo rate by 40 basis points," Das said while addressing his third press conference to announce COVID-19-related relief measures.

The MPC maintained its accommodative stance.

Das said the decision was taken at an off-cycle meeting of the monetary policy committee that was done over the past three days.