Mumbai, Dec 5 || RBI Governor Sanjay Malhotra announced on Friday that the monetary policy committee (MPC) meeting has unanimously decided to reduce the repo rate by 25 basis points to 5.25 per cent from 5.5 per cent earlier to spur growth in the economy.
The RBI Governor also said that the Central Bank would inject more liquidity in the economy by undertaking open market operations with the purchase of government securities to the tune of Rs 1 lakh crore. Besides, the RBI would also put in place a dollar-rupee swap arrangement of $5 billion.
Malhotra said that the surge in economic growth to 8.2 per cent growth in the second quarter of the current financial year and the sharp decline in inflation to 1.7 per cent had provided a rare “Goldilocks period” for the Indian economy.
He said that the benign inflation has given headroom to go for a repo rate cut to support growth. The RBI has also raised its projection for the country’s GDP growth to 7.3 per cent from 6.8 per cent earlier.