India's central bank reduced its key interest rates unexpectedly and unveiled measures to improve liquidity, at an unscheduled meeting, to combat the economic downturn caused by the spread of coronovirus.
The repo rate was cut by 75 basis points to 4.40 percent, with immediate effect, Reserve Bank of India Governor Shaktikanta Das announced Friday.
Accordingly, the marginal standing facility, or MSF rate and the Bank Rate were reduced to 4.65 percent from 5.40 percent.
Further, widening the liquidity adjustment facility corridor, the central bank trimmed the reverse repo rate by 90 basis points to 4.00 percent.
The bank reduced the cash reserve ratio by 100 basis points to 3.00 percent.
Four members of the MPC voted for 75 basis point reduction, while two members sought 50 basis point cut.
The MPC decided to continue with the accommodative stance as long as it is necessary to revive growth and mitigate the impact of coronavirus, or covid-19, on the economy, the bank said in a statement.
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