Arab Today, arab today india makes surprise interest rate cut to 775
Last Updated : GMT 06:09:44
Arab Today, arab today
Arab Today, arab today

India makes surprise interest rate cut to 7.75%

Arab Today, arab today

Arab Today, arab today India makes surprise interest rate cut to 7.75%

India's central bank
Mumbai - AFP

India's central bank cut interest rates by 25 basis points Thursday and signalled more could come, in a surprise announcement to boost the flagging economy after inflation cooled.
In a move applauded by the government and economists, the Reserve Bank of India (RBI) cut the benchmark repo rate -- the level at which it lends to commercial banks -- to 7.75 percent, the first reduction in 20 months.
RBI governor Raghuram Rajan said falling local food and global oil prices, which have brought stubborn inflation under control, were reasons for the cut, along with the government's commitment to contain the fiscal deficit.
"These developments have provided headroom for a shift in the monetary policy stance," Rajan said in a statement, adding that "subsequent policy actions will be consistent with this stance".
The RBI has been under pressure from government and business leaders to reduce rates to increase lending and help kickstart the economy, which has been struggling through its worst slowdown since the 1980s.
After storming to power at elections in May, Prime Minister Narendra Modi promised to reform and revive Asia's third-largest economy by attracting more foreign investors and bolstering manufacturing.
But Rajan's priority has been to bring inflation under control, although the bank had signalled a cut would be on the cards at its February 3 meeting.
The cut is the first since May 2013.
Inflation, especially high food prices, has caused much hardship for India's 1.2 billion population, of which nearly a quarter live in severe poverty, according to the World Bank.
- 'Positive development' -
Finance Minister Arun Jaitley said the cut was a "positive development" for the economy which would "certainly help in reviving the investment cycle that the government is seeking to restore".
Commerce Minister Nirmala Sitharaman described the move as "highly encouraging", while crediting the government with bringing inflation under control.
The Bombay Stock Exchange's benchmark Sensex surged in reaction to the cut, jumping 2.45 percent in early afternoon trading.
Daniel Martin, senior Asian economist at Capital Economics, said he expected the RBI's move would mark the start of a cycle of rate cuts.
"The economy could certainly use some support, with the industrial sector, in particular, clearly struggling to gain any momentum," he added.
The economy grew 5.3 percent year on year in July-September, significantly slower than the previous three months, and far too low to help create jobs for its tens of millions of young people.
Although consumer price inflation inched up to 5.0 percent year-on-year in December, from a three-year low of 4.38 percent in November, it remained well within the RBI's "comfort zone" of 6.0 percent.
The Wholesale Price Index, released on Wednesday, rose a marginal 0.11 percent in December from a year earlier, compared with zero percent in November -- the lowest rate since July 2009.
D.K. Joshi, chief economist at ratings agency Crisil, said the cut was a "pleasant surprise" that had come earlier than most analysts expected, and signalled inflation was now "under control".
"The central bank said they don't want to flip-flop, they wanted to be sure on inflation before a cut," Joshi said, adding that the "extraordinary" recent drop in global crude oil prices had helped.
Rajan warned in his statement, however, that future rate reductions would depend on prudent government action including "sustained high quality fiscal consolidation" as well as continuing falling prices.
The RBI kept the cash reserve ratio at 4.0 percent, but cut the reverse repo rate at which the RBI borrows from commercial banks by 25 basis points to 6.75 percent.

 

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today india makes surprise interest rate cut to 775 Arab Today, arab today india makes surprise interest rate cut to 775

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today india makes surprise interest rate cut to 775 Arab Today, arab today india makes surprise interest rate cut to 775

 



Arab Today, arab today
Arab Today, arab today Designer Aql Faqih aspires to innovation

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation
Arab Today, arab today Italy regions back 'big bang' autonomy

GMT 07:10 2017 Monday ,23 October

Italy regions back 'big bang' autonomy
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Iraq's Barzani isolated by his drive

GMT 04:36 2017 Tuesday ,24 October

Iraq's Barzani isolated by his drive
Arab Today, arab today Maltese demand justice for murdered

GMT 06:08 2017 Monday ,23 October

Maltese demand justice for murdered
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today World's deepest lake in peril

GMT 15:54 2017 Friday ,20 October

World's deepest lake in peril
Arab Today, arab today Ex-French minister Dati wants tough action

GMT 10:54 2017 Thursday ,19 October

Ex-French minister Dati wants tough action
Arab Today, arab today Lost Australia diver swam miles

GMT 19:09 2017 Monday ,23 October

Lost Australia diver swam miles
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today EU targets German carmakers

GMT 05:41 2017 Tuesday ,24 October

EU targets German carmakers
Arab Today, arab today Tesla to build wholly-owned plant

GMT 07:55 2017 Monday ,23 October

Tesla to build wholly-owned plant
Arab Today, arab today Rogina happy for reactions to “The Flood”

GMT 09:30 2017 Friday ,20 October

Rogina happy for reactions to “The Flood”
Arab Today, arab today Delhi braces for pollution 'airpocalypse'

GMT 16:07 2017 Friday ,20 October

Delhi braces for pollution 'airpocalypse'

GMT 08:15 2017 Thursday ,19 October

Actress Mona Zaki praises husband’s role

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam

GMT 19:09 2017 Thursday ,19 October

Massacre fears spark race

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 06:07 2017 Sunday ,22 October

15,000 Under Fives Die

GMT 12:54 2017 Saturday ,21 October

Malaysia Airlines picks new CEO

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 05:54 2017 Tuesday ,24 October

Second Palestinian mobile provider enters Gaza

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday