RBI reduces repo rate by 0.25%

The Reserve Bank of India cuts its repo rate by 25 basis points to 7.5% on Tuesday.  It had earlier cut the repo rate by 0.25% to 7.75% in January.

Government is however not pleased with RBI’s step.

Deputy Chairman at the Planning Commission, Montek Singh Ahluwalia said, “We are looking at it (the 25 bps rate cut) with unhappiness. We feel, the signal should have been stronger… Many people would say that the signal should have been more robust than 25 basis points.”

“Notwithstanding the moderation in non-food manufactured products inflation, the headline inflation is expected to be range-bound around current levels over 2013-14,” the bank said in a statement.

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