The Reserve Bank of India (RBI) has cut the repo and reverse repo rate by 25 basis points each. The repo rate has been cut to 4.75 percent from the existing 5 per cent while the reverse repo has been cut to 3.25 per cent from the existing 3.5 per cent.
The CRR has been left untouched at 5 per cent in the annual policy review on Tuesday.
The GDP forcast for the FY10 has been pegged at about 6 per cent, according to the policy.
The repo rate is the rate at which the central bank lends to banks while reverse repo is the rate at which it absorbs excess cash from the blackmoney markets. The central bank last cut interest rates in early March.
The central bank cut is growth estimate for 2008/09, which ended on March 31, to 6.5 to 6.7 percent, and forecast growth of around 6 percent for 2009/10. It said that managing large government borrowing in 2009/10 in a non-disruptive manner would be a major challenge, and said it would used a mix of monetary and debt management tools to ensure this was done smoothly.
No comments:
Post a Comment