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Article: RBI signals end of easy money as inf lation bites.
- Article from:
- Mail Today (New Delhi, India)
- Article date:
- October 28, 2009
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B ELYING the expectations that the Reserve Bank of India ( RBI) will maintain status quo, the apex bank on Tuesday announced the first phase of its ' exit' from the soft or low interest rate regime, sending the equity markets into a tailspin. But it stopped short of raising the key policy rates that could have resulted in banks raising their lending rates, for now.
RBI raised the statutory liquidity ratio ( SLR) by one per cent to the pre- crisis level of 25 per cent. However, it kept all the short- term benchmark interest rates -- repo ( at which RBI lends to banks) and reverse repo at which it pays to bank on their overnight deposits) -- and cash reserve ratio ...