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  1. Raghuram Rajan’s RBI cuts SLR by 50 basis points to 21.5 pct; CRR unchanged: Highlights

Raghuram Rajan’s RBI cuts SLR by 50 basis points to 21.5 pct; CRR unchanged: Highlights

The Reserve Bank of India under Governor Raghuram Rajan has held interest rates steady at 7.75 percent...

By: | Updated: February 3, 2015 6:09 PM
RBI rate cut, rbi slr cut, Raghuram Rajan

Reserve Bank of India cut the statutory liquidity ratio (SLR) – or the amount of bonds that lenders must set aside. (Reuters)

The Reserve Bank of India under Governor Raghuram Rajan has held interest rates steady at 7.75 percent on Tuesday after easing monetary policy just three weeks ago, leaving its next move probably until after the government presents its annual budget at the end of this month.

Instead, the Reserve Bank of India cut the statutory liquidity ratio (SLR) – or the amount of bonds that lenders must set aside – by 50 basis points to 21.5 percent of deposits from the two-week cycle starting on Feb. 7 in a bid to spur banks to inject more credit into the economy.

RBI SLR Rate Cut: Market Reaction

HIGHLIGHTS
Following are the key points of RBI’s bi-monthly monetary policy statement:
* Short-term lending rate unchanged at 7.75 pc
* Cash Reserve Ratio unchanged at 4 pc
* Statutory Liquidity Ratio cut to 21.5 pc, effective February 7, to unlock banking funds
* Current Account Deficit at 1.3 pc of GDP for 2014-15
* Inflation target at 6 per cent by January 2016
* GDP growth estimates under old base for current fiscal at 5.5 pc; 6.5 pc for 2015-16
* Banks asked to lend to productive sector to spur investment, growth
* Limit of foreign exchange remittance doubled to USD 2,50,000 per person annually
* 72 application for Small Finance Banks, 41 for Payments Banks received
* Export credit refinance to be replaced with provision of system level liquidity, effective February 7
* Foreign portfolio investors allowed to re-invest in G-Secs after their investment limits are utilised
* Bi-monthly policy statement for 2015-16 on April 7.
*Says appropriate to maintain current interest rate stance and wait given that no substantial new developments on disinflationary process or on fiscal outlook
*Says heightened volatility in global financial markets including through exchange rate channel constitute significant risk to inflation assessment
*Says inflation likely to be around target level of 6 percent by Jan 2016

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  1. Mayuri Shah
    Feb 3, 2015 at 5:45 pm
    read news in english at :vishwagujarat/en/
    Reply

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