India''s central bank unexpectedly cut short-term lending rates on Oct 20 in response to continued pressure from the global financial crisis. The Reserve Bank of India has cut the so-called repo rate by 100 basis points to 8% to stabilise India''s finances.This is the first cut in more than four years and comes ahead of a scheduled policy review on Friday.
The change will come into effect immediately. Banks worldwide have cut interest rates in a bid to boost their economies. The repo rate is the discount rate at which the central bank lends money to commercial banks to infuse liquidity into the market. The stock market jumped as much as 5.6% on the news but then fell back to close up 2.5%. On Friday it fell to its lowest close since June 2006.
The change will come into effect immediately. Banks worldwide have cut interest rates in a bid to boost their economies. The repo rate is the discount rate at which the central bank lends money to commercial banks to infuse liquidity into the market. The stock market jumped as much as 5.6% on the news but then fell back to close up 2.5%. On Friday it fell to its lowest close since June 2006.
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