India Central Bank Cuts Interest Rate “Pre-Emptively” For Second Time In 2 Months
In a surprise move, the RBI just cut its main interest rates for the second time in two months, taking it from 6.75% to 6.50%, in what the central bank calls a “pre-emptive” policy move, but what is in reality merely a confirmation that so far in 2015 at least 20 central banks have lowered their interest rate.
From the statement:
The RBI notes that the rupee has remained strong relative to peer countries. While an excessively strong rupee is undesirable, it too creates disinflationary impulses…
…softer readings on inflation are expected to come in through the first half of 2015-16 before firming up to below 6 per cent in the second half. The fiscal consolidation programme, while delayed, may compensate in quality, especially if state governments are cooperative. Given low capacity utilisation and still-weak indicators of production and credit off-take, it is appropriate for the Reserve Bank to be pre-emptive in its policy action to utilise available space for monetary accommodation.
Via Bloomberg:
- INDIA’S RBI CUTS RATE TO 7.5%
- INDIA CUTS REVERSE REPURCHASE RATE TO 6.50% FROM 6.75%
- RBI KEEPS CASH RESERVE RATIO OF SCHEDULED BANKS UNCHANGED AT 4%
- INDIAN RUPEE ONE-MONTH FORWARDS EXTEND GAIN AS RBI CUTS RATE
- RAJAN SAYS FURTHER MONETARY ACTION TO DEPEND ON INCOME DATA
- RBI: DISINFLATION EVOLVING AT FASTER RATE THAN ENVISAGED
…and more from Reuters:
…click on the above link to read the rest of the article…
