RBI CUTS KEY RATES

The RBI today cut its key short-term rates by 25 basis points each
to shore up faltering growth in the face of the global economic
slowdown. The repo rate, at which the Reserve Bank of India (RBI)
infuses cash into the banking system, will be cut to 4.75%, and the
reverse repo rate, at which it absorbs excess cash from banks, will
be reduced to 3.25%, effective immediately.

The Reserve Bank also repeated a call for banks to pass on its rate
cuts to customers and said deposit rates should also fall. "There
is scope for the overall interest rate structure to move down
within the policy rate easing already effected by the Reserve
bank," it said, adding its latest rate cut reinforced the case.

The central bank cut is growth estimate for the year ended March
2009 (FY 2009) to 6.5% to 6.7%, from 7% projected earlier. It has
forecast growth of around 6% for the year ending March 2010 (FY
2010).