RBI panel announced 25 basis points rate cut but Indian stock markets were expecting a small rate cut. The rate cut hasn't led to any major market movement.

Deepak Parekh, chairman of Housing Development Finance Corporation (HDFC), said that his bank can cut interest rate in case the Reserve Bank takes steps to reduce lending rates in the market, making the fund cost cheaper for banks.

Hoping reduction in key interest rates, Mr. Parekh said, "Banks are funding (parking) Rs 40,000 crore to Rs 60,000 crore with RBI under the reverse repo window. (This means) there is enough liquidity in the system and that is why there is a likelihood of interest rates coming down."

Exporters facing tough situation due to slump in overseas demand have a reason to cheer. The Reserve Bank of India has relaxed norms pertaining to export credit in the global market, enabling exporters to avail funds from overseas market.

Indian banks can now avail forex swap facility until the end of the financial year 2009/10 as the reserve Bank of India has approved its extension and increased the interest rate ceiling on foreign currency export credit with immediate effect. The move would help to mitigate the credit problem in the midst of tight liquidity conditions.

RBI has assured business community that it would take all possible steps to maintain adequate money supply in the country's finance system. It urged banks to cut interest rates to ensure credit at cheap rates without compromising quality of credit. The bank said, in a recently released report, that financial health of country is sound due to active liquidity management by bank.

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.