On Saturday, repo rate- the rate at which RBI lends to banks- was cut by the Reserve Bank of India (RBI) by 100 basis points to 6.5 per cent from 7.5 per cent. On the other hand, reverse repo rate- the rate at which banks park excess funds with RBI- was also cut by100 basis points to 5 per cent from 6 per cent, effective from December 8.

But the cash reserve ratio (CRR) has been kept unchanged by RBI at 5.5%. CRR is basically the proportion of deposits banks must keep with the central bank.

RBI is likely to announce further interest revision in its coming policy revision meet on Saturday. The apex bank is likely to cut key interest rates to ease the liquidity situation and propel economy. Banks are preparing to revise home and auto loans in a response to the RBI's move. They said that more infusion of liquidity would help to cut the lending rates to boost demand and hence propel economic growth. 

Indian economy would marginally be impacted by the global slowdown and government would do its best to mitigate the impact. The impact of the global slowdown may increase with time but country has not felt the indirect knock-on effect of the global crisis so far. It is said by the chairman of RBI who was speaking in the sidelines of a seminar on "Mitigating spill-overs and contagion — lessons from the global financial crisis." on Thursday.

The Government has raised the interest assistance provided to the public sector banks by one per cent to three per cent for up to Rs 3 lakh short-term crop loans to agriculturalists for this fiscal in order to incentivise the credit flow to farmers. The amount of subvention is to be calculated on the amount of the crop loan disbursed from the date of disbursement or drawal, up to the date of repayment or up to the date beyond which the outstanding loan becomes overdue, whichever is earlier.
 

The Reserve Bank India (RBI) would not directly lend US dollars to the financial institutions from the foreign exchange reserves of the country. Earlier, the Export-Import Bank of India (Exim Bank) had requested the Reserve Bank to issue direct dollar credit line to meet its lending requirements. Exim Bank is facing difficulty in getting funds from overseas institutions due to the international financial crisis. Exim Bank provides funds to exporters, importers and to the Indian companies planning investments overseas.

Tokyo - The Japanese central bank Tuesday decided on emergency measures to support Japanese companies hit by the global financial crisis.

The central bank's eight-member Policy Board agreed in an extraordinary session on a set of policies aimed at encouraging banks to offer loans to companies facing cash problems as a result of the crisis.

The board also decided to leave the short-term interest rate unchanged at 0.3 percent.