The Reserve bank of India (RBI) on Tuesday
cut rates for the first time in three years, lowering its repo rate by 50 basis points (bps) to 8 per cent. The move is expected to bring great relief to home loan buyers.
The central bank has, however, kept cash reserve ratio (CRR) unchanged at 4.75 per cent in its annual monetary policy review.
While
announcing the credit policy, RBI chairman D Sbbarao said that growth has risen significantly to 6.1 per cent in FY12. It projects the growth rate for current fiscal at 7.3 per cent.
The central bank said that inflation would moderate and be at 6.5 per cent by March 2013.
Business Today's Rajiv Bhuva (@Rajiv Bhuva) was covering the credit policy review meet on Twitter-- Growth in non-food #credit of scheduled commercial banks is projected at 17 per cent, says #RBI
- Aggregate #Deposits of scheduled commercial banks are projected to grow by 16 per cent, says #RBI
- Money supply growth for 2012-13, for policy purposes, is projected at 15 per cent, says #RBI
- RBI's policy actions expected to: stabilise growth, contain risks of inflation, and enhance liquidity cushion to the system
- Modest growth deviation &persisting upside risks to inflation inherently limit th space for further reduction in policy rates
- Domestically, the state of the economy is a matter of growing concern, says RBI
- Though inflation has moderated in recent months, it remains sticky & above the tolerance level, even as growth has slowed, says RBI
- Sensex swings up by 174 points, up 1.11 per cent, following the repo rate cut by RBI
- Domestic growth outlook for 2012-13 looks a little better than in 2011-12, says RBI
- #RBI projects baseline GDP growth for 2012-13 at 7.3 per cent
- Recent growth and inflation patterns suggest that the trend rate of growth has declined from its pre-crisis peak, says RBI
- RBI projects baseline WPI inflation for March 2013 at 6.5 per cent. Inflation is expected to remain range bound during the year.
- Risk to GDP growth:crude oil prices, wider fiscal deficit, larger borrowing, large current account deficit, inflation says RBI
- RBI stance of monetary policy: adjust policy rates to tackle growth moderation, guard against inflation, provide ample liquidity
- The reduction in the repo rate is based on an assessment of growth having slowed below its post-crisis trend rate, says RBI
- RBI emphasises that the deviation of growth from its trend is modest. At the same time, upside risks to inflation persist.
- Domestically, the state of the economy is a matter of growing concern, says #RBI
- #RBI cuts #Repo rate by 50 basis points
More details awaited 
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