India’s central bank lowers interest rate
05:56PM Tue 29 Jan, 2013
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Clothes on display at a shopping mall in Bengaluru. India’s central bank cut its GDP growth forecast for Asia’s third-largest economy to 5.5 per cent for the current fiscal year, from 5.8 per cent previously.[/caption]
Mumabi:
India’s central bank lowered its key policy rate for the first time in nine months on Tuesday, but struck a cautious note on further easing as it waits to see how the government’s upcoming budget aims to bring a bloated fiscal deficit under control.
The Reserve Bank of India cut the policy repo rate by 25 basis points (bps) to 7.75 percent to help support an economy set to post its slowest annual growth rate in a decade.
The size of the cut was in line with forecasts in a Reuters poll of analysts earlier this month. The central bank gave guidance back in October that it could reduce rates during the January-March quarter, and Indian bond and stock markets were largely unmoved as dealers had already priced in the move.
But the RBI unexpectedly also reduced the cash reserve ratio (CRR), the share of deposits that banks must keep with the central bank, by 25 bps to 4.00 per cent, which will infuse an extra 180 billion rupees ($3.4 billion) into the banking system.
-Reuters
Clothes on display at a shopping mall in Bengaluru. India’s central bank cut its GDP growth forecast for Asia’s third-largest economy to 5.5 per cent for the current fiscal year, from 5.8 per cent previously.[/caption]
Mumabi:
India’s central bank lowered its key policy rate for the first time in nine months on Tuesday, but struck a cautious note on further easing as it waits to see how the government’s upcoming budget aims to bring a bloated fiscal deficit under control.
The Reserve Bank of India cut the policy repo rate by 25 basis points (bps) to 7.75 percent to help support an economy set to post its slowest annual growth rate in a decade.
The size of the cut was in line with forecasts in a Reuters poll of analysts earlier this month. The central bank gave guidance back in October that it could reduce rates during the January-March quarter, and Indian bond and stock markets were largely unmoved as dealers had already priced in the move.
But the RBI unexpectedly also reduced the cash reserve ratio (CRR), the share of deposits that banks must keep with the central bank, by 25 bps to 4.00 per cent, which will infuse an extra 180 billion rupees ($3.4 billion) into the banking system.
-Reuters
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