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.

"Rs 7,000 cr refinancing will be given to SIDBI against its incremental direct lending to Micro and Small Enterprises," said RBI governor D Subbarao.

He added, "Another Rs 4,000 crore refinancing to National Housing Bank." He said that the details would come next week.

He concluded, "Announcement of petrol and diesel price cut will further ease inflation."