Home > economy, finance > India Lowers Rates to Jump Start Growth

India Lowers Rates to Jump Start Growth

The Reserve Bank of India Wednesday cut its benchmark lending rate for the fifth time since October, noting that the impact of the global financial crisis on the country’s economy has been greater than anticipated.

The central bank cut the repurchase rate, its lending rate, by half a percentage point to 5.0%, it said in a statement.

It also trimmed the borrowing rate, or reverse repurchase rate, by an equal amount to 3.5%, to discourage banks from parking their surplus funds with the RBI.

The rate cuts, which are effective immediately, are aimed at reviving India’s once-booming economy, which is slowing sharply as exports slump and the capital inflows that helped fuel growth dry up. Bank-credit growth has slowed, while higher government borrowings have made it even more expensive for companies to raise funds from the market.

[Article originally posted on WSJ.com] Continue reading

Advertisements
Categories: economy, finance Tags: , ,
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: