Property investment professionals with Indian interests could be breathing a collective sigh of relief after the government took steps to stabilise the financial system.
Mirroring recent measures passed by some western countries, India’s central bank has cut the repo rate by 100 basis points to 8.0 per cent.
The bank said it decided on the cut as India is currently experiencing the “indirect impact” of the world liquidity squeeze.
Bank officials said the cut was made in order to “maintain financial stability”.
Alpana Killawala, the Reserve Bank of India general manager, said:
“The global financial situation continues to be uncertain and unsettled. Even as countries directly affected by the turmoil have taken aggressive action to manage the crisis, confidence and calm is yet to be fully restored in the financial markets.”
Industry and trade groups welcomed the move, saying it would help bring back foreign confidence in the Indian economy.
The Associated Chambers of of Commerce and Industry of India said:
“The measure will bring relief to the Indian financial system which was facing liquidity pressure and will also reinstate lost investor confidence in the Indian economy.”
The Reserve Bank of India added it was continuing to monitor the situation and would take more action “as appropriate”.
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