21 April, 2009

In the annual policy announced, RBI has stated that the repo and reverse repo rates were cut by 25 basis points each. The repo rate has been cut to 4.75% from the existing 5% while the reverse repo has been cut to 3.25% from the existing 3.5%.

The CRR has been maintained at 5% in the annual policy review. The Central Bank said in a policy statement, "Large borrowings also militate against the low interest rate environment that the Reserve Bank is trying to maintain to spur investment demand in keeping with the stance of monetary policy." The RBI has cut its short-term lending rate by 425 basis points in six steps since Oct. 20 as the global economic crisis has affected Asia's third-largest economy more than expected.