The Monetary Policy Committee (MPC) 2025 reduced the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points with immediate effect to ____.

Correct option is D

The correct answer is: (d) 6.0 per cent

Explanation:

• In 2025, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points (bps), bringing it to 6.0%.

• This reduction was aimed at stimulating economic growth by lowering borrowing costs for banks and encouraging lending to consumers and businesses.

• The repo rate is a critical tool used by the RBI to control inflation and regulate money supply in the economy.

Information Booster:

• Monetary Policy Committee (MPC): The MPC meets every two months to review economic conditions and adjust the repo rate to meet the inflation target set by the government.

• A reduction in the repo rate generally leads to cheaper loans, which can spur consumption and investment, thus helping to boost economic activity.

• The liquidity adjustment facility (LAF) is a framework that helps banks manage their short-term liquidity needs by borrowing or lending to the RBI.