(MENAFN) The Reserve Bank of India (RBI) cut the key policy rate by 25 basis points, raising hopes of stimulating selling and buying of expensive commodities like cars and homes, Xinhua reported.
The policy repo rate under the liquidity adjustment facility is cut to 7.5 percent from 7.75 percent. The reduction will be put into effect immediately, setting tones of commercial banks in their lending policies.
The RBI has, however, kept the cash reserve ratio of scheduled banks unchanged at 4 percent of net demand and time liabilities, while reducing to 6.5 percent the reverse repo rate from 6.75 percent.
"The still weak state of certain sectors of the economy as well as the global trend towards easing suggests that any policy action should be anticipatory once, and sufficient data support the policy stance," the RBI said.
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