News Column

India's Central Bank Holds Key Interest Rates

June 2, 2014



NEW DELHI (Alliance News) - India's central bank decided to leave its key interest rates unchanged on Tuesday, but reduced the statutory liquidity ratio of banks.

The repo rate, the rate at which the Reserve Bank of India lends to banks, was maintained at 8.00%.

The RBI also retained its reverse repo rate at 7.00%. The reverse repo rate is the rate at which the central bank accepts deposits from banks.

The central bank kept the cash reserve ratio unchanged at 4.00%.

RBI reduced the statutory liquidity ratio of scheduled commercial banks by 50 basis points to 22.50% from 23.0%. The bank said the reduction in the required SLR will give banks more freedom to expand credit to the non-government sector.

The Reserve Bank remains committed to keeping the economy on a disinflationary course, taking CPI inflation to 8% by January 2015 and 6% by January 2016, it said.

The bank added that if the economy stays on this course, further policy tightening will not be warranted.



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Source: Alliance News


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