The Reserve Bank on Tuesday slashed its key interest rates by 0.25% and released Rs. 18,000 crore additional liquidity into the banking system to perk up growth through reduced cost of borrowing(after 9-month)
RBI Governor D Subbarao in the 3rd quarter monetary policy review surprised the market by cutting short-term lending rate called Repo by 0.25% to 7.75% and Cash Reserve Ratio (CRR) by similar margin to 4%, releasing Rs. 18,000 crore primary liquidity into the system.
The RBI, however, has reduced the growth projections for the current financial year to 5.5% from its earlier estimate of 5.8%
On inflation, it moderated the rate to 6.8% for March-end from earlier projection of 7.5%.
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