New Delhi  - India's central bank on Saturday lowered its key short-term lending rate (repo) as well as banks' cash reserve requirements to inject additional liquidity of about 850 billion rupees (18 billion dollars) to help growth amid the global economic slowdown, officials and news reports said.

The repo rate has been cut by 50 basis points to 7.5 per cent and the cash reserve ratio (CRR) stands lowered by 100 basis points to 5.5 per cent, a notification posted on the Reserve Bank of India's website said.

The RBI also cut the banks' bond reserve requirements by 1 percentage point to 24 per cent of their deposits with effect from November 8.

The announcement was surprising considering that it came a week after the RBI left key rates unchanged in its credit policy review. But the bank had then assured that it would undertake further steps to boost economic growth.

The move will infuse 850 billion rupees into the system, the PTI news agency reported saying that industry leaders and bankers felt that more measures were needed to bring down the commercial lending rates.

"RBI has taken welcome and concrete steps to ease the liquidity pressures. But more is needed to see that effective interest rates for borrowers come down by 3-4 per cent," K V Kamath, President of the Confederation of Indian Industry (CII), said.

"Global financial conditions continue to remain uncertain and unsettled and early signs of a global recession are becoming evident. These developments are being reflected in sharp declines in stock markets across the world and heightened volatility in currency movement," the RBI mentioned in the statement.

"International money markets are yet to regain calm and confidence and return to normal functioning," the RBI said adding it will continue to closely monitor developments in global and domestic financial markets and take swift action when appropriate. (dpa)