RBI cuts repo rates by 25 basis points, interest goes down to five-year low
He also stressed that the RBI will ensure that lenders pass on the benefits of lower interest rates to borrowers.
"Perhaps more important at this juncture is to ensure that current and past policy rate cuts transmit to lending rates," he said.
The last time the RBI had cut its repo rate was six months ago.
Rajan also retained his "accommodative" stance, raising the prospect of further rate cuts later this year.
"Borrowing is now significantly cheaper and will continue to get so," he said.
In another move, the RBI raised the reverse repo - or the rates lenders charge to the central bank - by 25 basis points to 6 per cent, while taking measures to ensure more availability of cash in the banking system.
Image: Wikimedia Commons
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