Asia Economy

India's central bank cuts reverse repo rate to try and spur bank lending

Key Points
  • The Reserve Bank of India cut its reverse repo rate by 25 basis points on Friday.
  • RBI Governor Shaktikanta Das said the central bank had cut its reverse repo rate to 3.75% with immediate effect, to encourage banks to "deploy surplus funds.".

The Reserve Bank of India cut its reverse repo rate by 25 basis points on Friday, in a bid to push banks to deploy excess funds within the system toward lending, and help revive growth.

In a speech, RBI Governor Shaktikanta Das said the central bank had cut its reverse repo rate to 3.75% with immediate effect, to encourage banks to "deploy surplus funds."

The central bank kept its benchmark repo rate unchanged at 4.40%, Das said.