1. RBI’s Raghuram Rajan cuts repo rate by 25 bps, CRR unchanged

RBI’s Raghuram Rajan cuts repo rate by 25 bps, CRR unchanged

RBI monetary policy review: Raghuram Rajan cuts repo rate by 25 basis points in its monetary policy review on Tuesday.

By: | Updated: June 2, 2015 2:22 PM
RBI MONETARY POLICY

RBI monetary policy review: RBI Guv Raghuram Rajan cuts repo rates by at least 25 basis points in its monetary policy review today. (PTI)

RBI monetary policy review: RBI Governor Raghuram Rajan in its monetary policy review on Tuesday cut repo rate by 25 basis points to 7.25 per cent from 7.5 per cent, third time this year, meeting market and government expectations of boosting growth by lowering borrowing cost.

The central bank left all other policy tools like cash reserve requirement unchanged at 4 per cent and Statutory Liquidity Ratio (SLR) at 21.5 per cent.

Financial Express Managing Director Sunil Jain ‘s take: “RBI has done its bit, its over to the banks now…. They need to pass on the cut to customers. But with very high unutilised capacity, private investment will take a year or more to recover. As a result, even consumer demand will remain sluggish. It will remain a muted year”.

Following are the highlights of RBI’s monetary policy statement:

Short-term lending rate (repo) cut by 0.25 pc to 7.25 pc.

Cash Reserve Ratio unchanged at 4 pc.

Statutory Liquidity Ratio retained at 21.5 pc.

Inflation expected to rise to 6 pc by January 2016.

Strong food policy management needed to keep inflation and inflationary expectations under check.

Growth forecast lowered to 7.6 pc for 2015-16 from 7.8 pc projected in April.

Banks asked to pass on benefit of rate cuts to borrowers.

Targeted infusion of bank capital into PSU banks needed to ensure credit flows to productive sectors.

Third bi-monthly policy statement on August 4.

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  1. S
    satyanjai yadav
    Jun 7, 2015 at 5:18 am
    Economics is a science which affects the most its inventors. Lord Keynes invented macro economics, ...multiplier theory, acceleration prinl, effective demand etc, but he got confused and his economics is denounced as boom ,gloom and doom theory. He became totally confused and later retracted his theory to advanced economies only. Mr Raghu Ram Rajan, propounded his economics through various articles as how SMEs credit papers can be converted into securities which can be sold like bonds in the market. He thought he has become a Wizard in economics and his over economics has killed Indian economic growth perspective. He is most denounced economist in India at present. Why it is? Because Economics is a science which affects the most on its inventors. Mr. Modi denounces Manmohan as failed economist. It is economic effect on economist!
    Reply

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