Highlights of growth stimulus unveiled by India’s central bank

December 6th, 2008 - 3:26 pm ICT by IANS  

Mumbai, Dec 6 (IANS) Following are the highlights of a growth stimulus package unveiled by Reserve Bank of India (RBI) Governor D. Subbarao here Saturday in a bid to cushion the impact of global slowdown on the country’s economy:- Repo rate cut by 100 basis points to 6.5 percent

- Reverse repo rate cut by 100 basis points to 5 percent

- No changes in cash reserve ratio and statutory liquidity ratio

- Refinance of Rs.7,000 crore (Rs.70 billion/$1.4 billion) for Small Industries Development Bank of India

- Refinance of Rs.4,000 crore (Rs.40 billion/$800 million) for National Housing Bank

- Housing loans under Rs.2 million classified under priority sector

- Exceptional treatment to commercial real estate exposures

- Restructuring by banks eligible for exceptional regulatory treatment

- Measures should step up demand and arrest the growth moderation

- Net liquidity since September enhanced by Rs.300,000 crore (Rs.3,000 billion/$60 billion)

- Difficult to precisely anticipate every development of global crisis

- Recession will be deeper, recovery longer than earlier anticipated

- Period of painful adjustment for Indian economy inevitable

- Fundamentals of Indian economy continue to be strong

- Economists predicting the worst global recession since the 1970s

- Confidence in global credit markets continues to be low

- Credit lines remain clogged

- India’s exports declined in October for first time in seven years

- Demand for bank credit slackening, despite comfortable liquidity

- But inflation, based on wholesale prices, declining

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