**Summary:**
This notification, RBI20192020182 FMOD.MAOG.No.14001.01.001201920, issued by the Reserve Bank of India (RBI) on March 27, 2020, announces a reduction in the policy Repo rate under the Liquidity Adjustment Facility (LAF) by 75 basis points, from 5.15 percent to 4.40 percent, effective immediately. The decision was made by the Monetary Policy Committee (MPC) as stated in the Seventh Bimonthly Monetary Policy Statement, 2019-20. Furthermore, the Reverse Repo rate under the LAF has been adjusted from 4.90 percent to 4.00 percent, also with immediate effect, consequent to the widening of the LAF corridor. All other terms and conditions of the existing LAF Scheme remain unchanged. Radha Shyam Ratho, Chief General Manager, is the contact person for this notification.
Key Entities Referenced
Liquidity Adjustment Facility (LAF): A tool used by the Reserve Bank of India to manage liquidity in the market through repo and reverse repo operations.
Repo Rate: The rate at which the Reserve Bank of India lends money to commercial banks against the collateral of government securities.
Reverse Repo Rate: The rate at which the Reserve Bank of India borrows money from commercial banks.
Monetary Policy Committee (MPC): A committee of the Reserve Bank of India responsible for setting monetary policy, including the policy repo rate.
Seventh Bimonthly Monetary Policy Statement, 2019-20: A periodic statement released by the Reserve Bank of India outlining the monetary policy decisions and rationale.
Radha Shyam Ratho: Chief General Manager at Reserve Bank of India
Reserve Bank of India: The central bank of India, responsible for regulating the country's monetary policy and banking system.
RBI/2019-2020/182
FMOD.MAOG.No.140/01.01.001/2019-20 March 27, 2020
All Liquidity Adjustment Facility (LAF) participants
Madam/Sir,
Liquidity Adjustment Facility – Repo and Reverse Repo Rates
As announced in the Seventh Bi-monthly Monetary Policy Statement, 2019-20, today, it has
been decided by the Monetary Policy Committee (MPC) to reduce the policy Repo rate under
the Liquidity Adjustment Facility (LAF) by 75 basis points from 5.15 per cent to 4.40 per
cent with immediate effect.
2. Further, consequent upon the widening of the LAF corridor, the Reverse Repo rate under
the LAF stands adjusted from 4.90 per cent to 4.00 per cent with immediate effect.
3. All other terms and conditions of the extant LAF Scheme will remain unchanged.
Yours sincerely,
(Radha Shyam Ratho)
Chief General Manager