Making the first policy rate cut in 3 years, the Reserve Bank of India on Tuesday cut the repo rate by 50 basis points.Announcing the Monetary Policy for the year 2012-2013, RBI governor D Subbarao said that the Repo Rate has been reduced by 50 basis points from 8.5% to 8%. Repo rate is the rate at which banks borrows money from RBI. The cash reserve ratio has been left unchanged at 4.75%.Mr. Subbarao said that the liquidity conditions were moving towards RBI's comfort zone and added that there is a need to increase fuel prices for macro economic stability.Reacting to the Reserve Bank's cut in repo rate, leading banks of the country said that lending rates will fall after the Reserve Bank's action.