The Reserve Bank of India (RBI) has reduced the repo (short-term lending) rate to 8.00% and reverse repo (short-term borrowing) rate to 7.00% per annum at its annual monetary policy review meeting held for the financial year 2012-13 on April 17, 2012.
Reserve Bank of India’s Policy on Curbing Rising Prices in India
New Delhi (Delhi, India), October 17, 2019
The Reserve Bank of India (RBI) has reduced the repo (short-term lending) rate and reverse repo (short-term borrowing) rate by 50 basis points each at its annual monetary policy review meeting held for the financial year 2012-13 on April 17, 2012. With this, now the revised repo rate is 8.00%, while the reverse repo rate is at 7.00% yearly.
The RBI’s Marginal Standing Facility (MSF) rate is now at 9.00 percent. However, the RBI has left the CRR (Cash Reserve Ratio) unchanged at 4.75% per annum. The Cash Reserve Ratio or CRR is the minimum amount of money against deposits, which the banks have to keep as cash or specified government securities.
Earlier, the high inflation rate increased pressure on the Reserve Bank of India to extend the interest-rate increases. The persistent high inflation has forced the Reserve Bank of India for a tight monetary policy to curb the demand and cool inflationary expectations.
In its monetary policy announcement for the financial year 2012-13, the Reserve Bank of India has predicted overall inflation to be at an average of 6.50 percent per annum on year-on-year basis.
The Reserve Bank of India fought against the high inflation rate with hikes in the borrowing costs. To tame the rising inflation rate in India, the Reserve Bank of India raised borrowing rates thirteen times since March 2010. It raised its lending rate by 4.00 percentage points since mid-March 2010. This was the fastest pace of interest rate rises among the major Asian economies.
The RBI had last hiked the repo (short-term lending) rate and reverse repo (short-term borrowing) rate by 25 basis points each in its mid-quarter review of the Indian monetary policy on October 25, 2011.
Reserve Bank of India’s Historical Repo Rate and Reverse Repo Rate
April 17, 2012 Repo Rate: 8.00% Reverse Repo Rate: 7.00%
March 15, 2012 Repo Rate: 8.50% Reverse Repo Rate: 7.50%
January 24, 2012 Repo Rate: 8.50% Reverse Repo Rate: 7.50%
December 16, 2011 Repo Rate: 8.50% Reverse Repo Rate: 7.50%
October 25, 2011 Repo Rate: 8.50% Reverse Repo Rate: 7.50%
September 16, 2011 Repo Rate: 8.25% Reverse Repo Rate: 7.25%
July 26, 2011 Repo Rate: 8.00% Reverse Repo Rate: 7.00%
June 16, 2011 Repo Rate: 7.50% Reverse Repo Rate: 6.50%
May 03, 2011 Repo Rate: 7.25% Reverse Repo Rate: 6.25%
March 17, 2011 Repo Rate: 6.75% Reverse Repo Rate: 5.75%
January 25, 2011 Repo Rate: 6.50% Reverse Repo Rate: 5.50%
November 02, 2010 Repo Rate: 6.25% Reverse Repo Rate: 5.25%
September 16, 2010 Repo Rate: 6.00% Reverse Repo Rate: 4.75%
July 27, 2010 Repo Rate: 5.75% Reverse Repo Rate: 4.25%
July 02, 2010 Repo Rate: 5.50% Reverse Repo Rate: 4.00%
April 20, 2010 Repo Rate: 5.25% Reverse Repo Rate: 3.75%
March 19, 2010 Repo Rate: 5.00% Reverse Repo Rate: 3.50%
January 29, 2010 Repo Rate: 4.75% Reverse Repo Rate: 3.25%
October 27, 2009 Repo Rate: 4.75% Reverse Repo Rate: 3.25%
July 28, 2009 Repo Rate: 4.75% Reverse Repo Rate: 3.25%
April 21, 2009 Repo Rate: 4.75% Reverse Repo Rate: 3.25%
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