RBI keeps Key Interest Rates Unchanged - Cuts SLR by 50 bps

The Reserve Bank of India (RBI) on Tuesday did not change the key interest rates as speculated. But, the apex bank cut the  statutory liquidity ratio (SLR) by 50 basis points. RBI kept the benchmark repurchase rate at 7.75 per cent.

Looking at the macro-economic indicators, it has been speculated by all that the RBI would cut the key interest rates while reviewing its credit policy for the month of January. But, there was not rate cut announcement by the apex bank that led to tumble the stock markets in India.

BSE Sensex fell by around 171 points and the Nifty down by 45 points. Investors were anticipated a rate cut but that was not happened as expected. The Governor of RBI Raghu Rajan said inflation was likely to at around 6 per cent by the end of January 2016 but other factors - monsoon and oil price could be great factors.

Bank stocks fell heavily following the no rate cut by the RBI today at BSE Sensex and Nifty. 

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RBI to review Credit Policy Tomorrow, Scope for Rate Cut?

Tomorrow, the Reserve Bank of India (RBI) will review credit policy, and speculations are buzzing around of possible rate cut. Headline inflation has been moderated, macro-economic indicators favor a rate cut.

Today stock markets ended in flat, BSE Sensex was down by 60 points at Nifty was down by 45 points. But, in the intra-day trading markets were down heavily following weak global cues.  Last week markets were full of volatile but gained by margin.

Tomorrow, the apex bank would review the macro-economic indicators and may come up with a rate cut announcement. Investors would be watching putting their fingers crossed. There are possibility of high returns from the market, if the apex bank favors a cut in the key interest rates  - repo rate, reverse repo rate and cash reserve ration.  On the contrary, the market would nose-dive, if there would not any rate cut announced by the apex bank.

Another big concern about the manufacturing sector's performance. The statistics issued by the government were not convincing for the investors to have confidence on the market. It may trigger a loss any time, and foreign investors would pull out their funds from the market.

In the international market, all the factors are conducing for a possible rate cut - oil prices are falling, EU announces stimulus - Greece issues also most solved, EU to host trade meet with India, China's economy has been growing slowly and the big thing is that India has become partner with US.

A perfect situation for the apex bank to consider for right move to keep the interest of the economy and investor. There is scope for possible rate cut tomorrow and if that happens so then markets would further touch to new high. Lets wait and watch - what RBI decides for us.

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RBI cuts repo-rate and CRR by 25bps

The Reserve Bank of India has cut the interest rate by 25 bps on Tuesday, as speculated. The Cash Reserve Ratio was also cut to 4 per cent from 4.5 per cent, by cutting down 25 bps.

The RBI has also cut the repo-rate by 25 basis points to 7.75 per cent from 8 per cent, for the first time since April 2012. The ease in the monetary policy will boost the Indian economy.

The cut in CRR will help to infuse around 1.80 billion rupees into the economy.

Speaking to media, the governor of RBI, Duvvuri Subbarao told that the soften in the headline inflation was the major factor leading for a cut in the interest rates by 25 basis points.

The headline inflation was at 8.1 per cent in the September 2012 and dropped to 7.2 per cent in December 2012.

The GDP was recorded 5.5 per cent in the first quarter and dropped to 5.3 in the second quarter.

The stock markets - BSE Sensex and NSE Nifty gained following the rate cut declared by the RBI.

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RBI slashes CRR by 0.75%

Business News: The Reserve Bank of India (RBI) slashed the cash reserve ratio (CRR)by 0.75 per cent to 4.75 per cent from 5.5 per cent. The move will help to infuse around Rs.48,000 crore into Indian economy.

The infusion of money into the economy would help to address the inflationary pressure, which is high due to less velocity of funds in the country. The CRR is the portion of deposits that banks need to keep with the apex bank.

The low CRR will also help the banks for having higher liquidity into the market, which ultimately will have greater impact on the economy.

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