Mumbai: After a gap of 9 months, the Reserve Bank of India (RBI) on Tuesday slashed short term lending (repo) rate by 0.25 percent to 7.75 percent, a move that will reduce the cost of home, auto and corporate loans.
Following are the highlights of the RBI's third quarter monetary policy review:
- Short-term lending rate or repo rate reduced by 0.25 percent to 7.75 percent, first time in nine months.
- Reverse repo rate stands adjusted to 6.75 percent.
- Reduces cash reserve ratio (CRR) by 0.25 percent to 4 percent.
- CRR cut to infuse Rs 18,000 crore in system from Feb 9.
- RBI trims growth for fiscal 2012-13 to 5.5 percent from 5.8 percent.
- Policy action aimed at aiding growth by encouraging investment and improving liquidity to support credit flow.
- Review intends to contain inflation and anchor inflation expectations.
- RBI says inflation has come off its peak.
- Revises downward March-end inflation projection to 6.8 percent from 7.5 percent.
- Q3 CAD likely to widen beyond 5.4 percent of GDP.
- Bank rate stands adjusted to 8.75 percent with immediate effect.
- Next mid-quarter review of monetary policy on March 19.