The Reserve Bank of India’s Monetary Policy Committee on Friday cut the repo rate by 25 basis points to 5.25%.

The repo rate is the interest rate at which the central bank lends money to commercial banks. The Monetary Policy Committee reviews the rate every two months.

The committee had kept the repo rate unchanged at 5.5% in both August and October. In June, it had cut the rate by 50 basis points from 6% to 5.5%, following reductions of 25 basis points each in April and February.

A basis point is one-hundredth of a percentage point. Basis points are used to describe the percentage change in the value of a financial instrument.

Central banks usually reduce repo rates to stimulate economic growth by making borrowing cheaper for individuals and businesses. This transl

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