At its last policy meeting on 17 April, the Reserve Bank of India (RBI) cut the repo rate by 50 basis points to 8.00% and the reverse repo rate also by 50 basis points to 7.00%, in a decision that surprised the market, which had anticipated a 25 basis-point cut. The Bank left the cash reserve ratio unchanged at 4.75%. The decision marks the first interest rate cut since April 2009. According to the Central Bank, the decision to cut interest rates is justified within the context of a slowdown in economic growth which, in turn, is contributing to a moderation in core inflation. The Bank, however, added that
India Monetary Policy
Central Bank cuts rates for the first time in three years
April 19, 2012
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Note: Reserve Bank of India (RBI) Repo Rate in %.
Source: Reserve Bank of India (RBI).
India Economic News
October 17, 2016
Recently-released data related to India’s external sector showed that the trade deficit totaled USD 8.3 billion in September, which was a smaller shortfall than the USD 10.2 billion gap recorded in September 2015 (August 2016: USD 7.7 billion deficit).
October 15, 2016
In September, consumer prices fell 0.23% from the previous month, which followed August’s flat growth.
October 12, 2016
The fall in industrial production moderated in August, after recording the largest contraction since November 2015 in July.
October 5, 2016
Activity in India’s manufacturing sector lost steam in September.
October 4, 2016
The newly facelifted Reserve Bank of India (RBI) decided to ease monetary policy at a scheduled meeting on 4 October, cutting the repurchase rate from 6.50% to 6.25%—an over five-year low.