The Reserve Bank of India (RBI) on Thursday reduced the repo rate under the liquidity adjustment facility (LAF) by 25 basis point and also changed its policy stance to "neutral" from existing "calibrated tightening". The repo rate, or the key interest rate at which the central bank lends short-term funds to commercial banks, now stands at 6.25 per cent, as predicted by only 21 of 65 analysts polled by news agency Reuters. Most polled respondents had expected the central bank to only change the stance, to neutral.
