The Reserve Bank of India on Saturday decided to reduce the one-day and 14-day repo rate under the liquidity adjustment facility by 0.5 per cent to 4.5 per cent with effect from Monday.

The apex bank, in a statement, said it has decided to reduce the repo rate under LAF in view of the current macro-economic and overall monetary conditions.

Thereafter, as per the current practice, the cut off rate for acceptance of bids for one-day and 14-day repo would continue to be decided by RBI at each auction, the statement added.

RBI had reduced the repo rate under LAF by 0.5 per cent to 5 per cent from March 3, 2003.