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Reserve Bank’s new measures

The RBI’s package of monetary measures announced on November 1 is significant both for its timing and scope. Announced on a day the markets are closed, the package cannot be faulted for being directed at stock markets alone. In fact the RBI has been guided by the actions of the Federal Reserve and the Bank of Japan who last week cut their benchmark interest rates to record low levels in a bid to shore up their economies from moving into a deep recession.The measures include a repo rate cut by 0.50 percentage point, a CRR reduction by one percentage point and a reduction in the SLR by one percentage point.In addition, banks are being given access to a new window for refinancing.

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