Financial News: India Central Bank Holds Key Policy Rates; Cuts

India Central Bank Holds Key Policy Rates; Cuts CRR By 50 Bps

12/06/2024 - 00:47:00 (RTTNews)

(RTTNews) - The Reserve Bank of India left its key interest rates unchanged for the eleventh straight session and reduced the cash reserve ratio by 50 basis points to boost liquidity.

After the conclusion of the three-day monetary policy meeting, Governor Shaktikanta Das said the committee voted 4-2 to maintain the policy repo rate at 6.50 percent. The repo has been at 6.50 percent since February 2023.

The bank lowered the CRR for all banks by 50 basis points to 4.0 percent. This was the first reduction since March 2020.

The move will release liquidity of INR 1.16 trillion into the banking system. CRR is the proportion of deposits that banks must set aside as cash.

The MPC also decided to continue with the neutral monetary policy stance and to remain unambiguously focused on a durable alignment of inflation with the target, while supporting growth.

The bank today downgraded its real GDP growth outlook for 2024-25 to 6.6 percent from 7.2 percent.

Policymakers observed that headline inflation surged above the upper tolerance level to 6.2 percent in October. Inflation for 2024-25 was projected at 4.8 percent, up from the previous forecast of 4.5 percent.

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