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15 Jan 2015
India's Central Bank Cuts Interest Rate
FXStreet (Mumbai) - The Reserve Bank of India (RBI) surprised the markets by cutting the benchmark interest rate by 25 basis points bringing the key rate to 7.75% in reaction to slowing inflation citing falling oil prices and weakening demand, as reasons for the surprise move.
Key Quotes:
The Central Bank stated in its statement:
"Inflationary pressures (measured by changes in the consumer price index) have been easing,"
"The path of inflation, while below the expected trajectory, has been consistent with the assessment of the balance of risks in the Reserve Bank’s bi-monthly monetary policy statements."
"to some extent, lower than expected inflation has been enabled by the sharper than expected decline in prices of vegetables and fruits since last September, ebbing price pressures in respect of cereals and the large fall in international commodity prices, particularly crude oil. Crude prices, barring geo-political shocks, are expected to remain low over the year."
"These developments have provided headroom for a shift in the monetary policy stance."
Key Quotes:
The Central Bank stated in its statement:
"Inflationary pressures (measured by changes in the consumer price index) have been easing,"
"The path of inflation, while below the expected trajectory, has been consistent with the assessment of the balance of risks in the Reserve Bank’s bi-monthly monetary policy statements."
"to some extent, lower than expected inflation has been enabled by the sharper than expected decline in prices of vegetables and fruits since last September, ebbing price pressures in respect of cereals and the large fall in international commodity prices, particularly crude oil. Crude prices, barring geo-political shocks, are expected to remain low over the year."
"These developments have provided headroom for a shift in the monetary policy stance."