New Delhi, India (India Times) – The Reserve Bank of India (RBI) in its policy meet on Tuesday kept both the repo and reverse repo rates on hold, but slashed SLR by 50 bps to 22 per cent and reduced the HTM (Held to Maturity) ceiling to 24 per cent.
These two measures are targeted towards improving liquidity in the economy and in turn expand credit to productive sectors given the fact that growth is picking up and inflation is showing signs of moderation.
Speaking to reporters, Raghuram Rajan assured investors that short-term risks are more balanced currently and the RBI has room to cut rates, if disinflation continues.
Raghuram Rajan further added that the RBI will not hold rates high longer than necessary, which has remained an overhang on the markets for quite some time now. A slight cut in interest rates is important as it will help revive the investment cycle and push GDP growth, say analysts.