Central bank cuts key rates

April 21st, 2009 - 1:02 pm ICT by IANS  

Mumbai, April 21 (IANS) India’s Central bank cut key rates Tuesday by 25 basis points in a move to infuse more liquidity into the system and stimulate lending growth.
The Reserve Bank of India (RBI) cut the repo rate by 25 basis points from the current 5 percent to 4.75 percent, while the reverse repo rate has been brought down to 3.25 percent from 3.5 percent earlier.

The repo rate is the rate at which the RBI borrows from the banks, while the reverse repo rate is the interest rate paid to banks for RBI’s borrowings from them.

However, RBI kept the cash reserve ratio (CRR) unchanged at 5 percent. CRR is the minimum cash reserve balance banks must maintain against customer deposits.

RBI had last cut key rates March 4.

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