RBI cuts repo, reverse repo rates by 100 bps

The Reserve Bank of India on Saturday cut the repo rate - the rate at which RBI lends to banks - by 100 basis points to 6.5 per cent from 7.5 per cent and reverse repo - the rate at which banks park excess funds with RBI - by 100 basis points to 5 per cent from 6 per cent, effective from December 8. However it has kept cash reserve ration (CRR) – the proportion of deposits banks must keep with the central bank – unchanged at 5.5 per cent. RBI governor D Subbarao said, "Rs 7,000 cr refinancing will be given to SIDBI against its incremental direct lending to Micro and Small Enterprises." "Another Rs 4,000 crore refinancing to National Housing Bank," he said, adding, "Details next week". "Announcement of petrol and diesel price cut will further ease inflation," he added.