Global Economic Collapse: India’s central bank cuts rates to near decade lows to revive growth. The 6 person Monetary Policy Committee cut the repo rate by 25 basis points to just over 5%, for a fifth (5) straight meeting this year. The reverse repo rate was reduced to just under 5%.

By Swati Bhat and Euan Rocha

MUMBAI, Oct 4 (Reuters) – The Reserve Bank of India on Friday cut the key policy rate to its lowest levels in nearly a decade, stepping up its efforts to kickstart an economy growing at its slowest pace in six years.

The central bank, which also sharply trimmed its 2019-20 growth forecast, said that it will maintain its “accommodative” policy stance “as long as it is necessary” to revive growth, and ensure inflation remains within target.

The 6 Monetary Policy Committee (MPC) cut the repo rate by 25 basis points to just over 5%, for a fifth straight meeting this year and in line with expectations in a Reuters poll. The reverse repo rate was reduced to just under 5%.

And markets expect further easing after Friday’s reduction, with the RBI seen delivering another 15-basis point cut at its December policy, before an extended pause, according to a Reuters poll conducted before the policy review.

With the protracted Sino-U.S. trade war raising the risk of a global recession, central banks around the world – including the U.S. Federal Reserve and the European Central Bank – have ramped up monetary support in recent months.

India’s cumulative rate cuts totalling 135 bps make it the most aggressive central bank in Asia. The RBI’s repo rate is now at its lowest levels since March 2010, when it stood at 5%, following the global financial crisis.

“In our opinion, RBI as a central bank has done more than enough to stabilise economic settings. From here onward, monetary easing may not achieve much incrementally,” said Rupa Rege-Nitsure, chief economist of L&T Finance Holdings.

She said it is now the government’s task to remove structural constraints in the economy, with the RBI supporting this effort by fostering financial stability.

All six MPC members voted in favour of a rate cut and for retaining the accommodative stance, the statement said.

Markets wobbled after the RBI decision.