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Repo Rate, CRR Cut By 25 Basis Points; Expect Cheaper Loans

PUBLISHED BY: SURENDER KUMAR
JANUARY 28, 2013

   
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Quite expectedly, the Reserve Bank has cut the repo rate by 25 basis points (.25 per cent) to 7.75%, taking comfort from cooling inflation support an economy showing its slowest growth in a decade. But unexpectedly, the RBI also reduced the cash reserve ratio (CRR) by 25 bps to 4 %, which will make available an additional Rs 18,000 crore in the banking system.

 

 

Notably, for the past nine months, the RBI had been resisting pleas from businesses for rate cuts.

 

The growth estimate for 2012-13 has also been reduced to 5.5 % from 5.8 %.  The cut in the repo rate and CRR brings a cheer for many as it will make home loans cheaper.




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