Reserve Bank of India announced its monetary policy on Tuesday.
Here are the highlights:
- Short-term lending rate (repo) cut by 0.25% to 7.25 %
- Cash Reserve Ratio unchanged at 4%
- Statutory Liquidity Ratio retained at 21.5%
- Inflation expected to rise to 6% by January 2016
- Strong food policy management needed to keep inflation and inflationary expectations under check
- Growth forecast lowered to 7.6% for 2015-16 from 7.8% projected in April
- Banks asked to pass on benefit of rate cuts to borrowers
- Targeted infusion of bank capital into PSU banks needed to ensure credit flows to productive sectors
- Third bi-monthly policy statement on August 4.
Image: Reserve Bank of India Governor Raghuram Rajan speaks during a press conference. Photograph: Danish Siddiqui/Reuters