RBI cuts policy rate by 0.50pc

New Delhi (CNST), Apr.17: The Reserve Bank of India cut repo rates by 0.50 per cent to 8.0 per cent. Repo rate is the rate at which banks borrow money from RBI. This is a reference rateused by banks to lend to their customers like companies and individuals. The central bank also cut the reverse repo rate, or the rate at which it sucks out liquidity from the systemby taking money from banks, by 0.50 per cent. The cash reserve ratio, thepercentage of deposits keptby banks with RBI, was left unchanged at 4.75 per cent. However, there is "limited space for further reduction in rates", RBI GOvernor D. Subbarao said. Falling manufacturing output and slow growth has pushed Reserve Bank of India to cutbenchmark rates that could reduce cost of borrowing forcorporates and individuals. Bankers are likely to pass on the 0.50 per cent cut to borrowers. So home loans, car loans, personal loans could get cheaper to that extent. A poll of bankers conducted by NDTV Profit showed that 70% respondents were confident of a 25 basis point cut in therepo rate, while 60pc felt that RBI will leave CRR untouched. -NDTV.com