MUMBAI (Reuters) - India’s central bank reduced its policy interest rate by a widely expected 25 basis points on Tuesday, taking comfort from cooling inflation as it made the first cut in nine months to support an economy headed for its slowest growth in a decade.
The Reserve Bank of India cut its key repo rate to 7.75 percent, as forecast by a Reuters poll. Subsequently, the reverse repo rate fell to 6.75 percent.
The RBI unexpectedly also reduced the cash reserve ratio (CRR), the share of deposits banks must keep with the central bank, by 25 bps to 4.00 percent, which will infuse an additional 180 billion rupees into the banking system.
(For main story -- RBI cuts repo rate, CRR by 25 basis points, click here)
It left the minimum requirement for banks’ government bond holdings at 23 percent of deposits.
Following is a timeline of changes to the reverse repo rate since February 2001.
* RATE (percent) EFFECTIVE DATE (day-month-year)
* Note: Prior to October 29, 2004, the reverse repo rate was known as the repo rate. For further details, please see central bank’s website: www.rbi.org.in.
Compiled by Shamik Paul