The Reserve Bank of India brought some cheer for the middle class on Tuesday as it cut key rates for the first time in nine months in its monetary policy review. The repo rate was cut by 25 basis points and the cash reserve ratio (CRR) was also reduced by 25 bps.
Soon after the policy announcement, the 30-share BSE Sensex was trading at 20,098.08, down 5.27 points or 0.03 per cent as 11.17 am. The 50-share Nifty was at the same time was trading at 6094.15, up 19.35 points or 0.32 per cent.
Business Today had in its analysis of the central bank's last monetary policy review predicted that the Reserve Bank would go for a rate cut in January.
Senior Editor Anand Adhikari had said: "It is clear that there will be a softening of interest rates only from January, going by the RBI's guidance in October this year. The central bank says that headline inflation has been below the RBI's projected levels in the last two months...It is clear that there will be a softening of interest rates only from January, going by the RBI's guidance in October this year. The central bank says that headline inflation has been below the RBI's projected levels in the last two months."
- Repo rate now stands at 7.75 per cent
- CRR now stands at 4 per cent
- Moderation in inlfation has given way for reducing key rates
- Inflation target to 6.8 per cent for Mar 2013
- CRR cut to infuse Rs 18,000 crore of liquidity in the system
- RBI to work in conjunction with fiscal steps
- Policy action guidance to support growth
- INflation likely to remain range bound at current level
- Lowering CRR last year didin't give us the desired result
- Policy to provide rate environment for growth
- Large fiscal deficit to crowd out private investment
- Bank rate stands adjusted 8.75 per cent
- RBI trims 2012-13 growth estimate to 5.5 per cent from 5.8 per cent
- RBI says inflation has come off its peak
- Q3 CAD likely to widen beyond 5.4 pc of GDP.
- Next mid-quarter review of monetary policy on March 19.