RBI slashes key interest rates, CRR to boost investment, spending

"On a review of current global and domestic macroeconomic situation," the apex bank said it has taken the decision to adjust its "policy stance from demand management to arresting the moderation in growth."

"The reduction in the policy interest rates and the CRR," it said, "will further enable banks to provide credit for productive purposes at appropriate interest rates" and assist India's economic activity to "recover sharply."

The Reserve Bank on its part would constantly monitor "the global developments and the domestic economic situation" and "continue to maintain a comfortable liquidity position in the system," it added.

In December, the RBI slashed its key interest rates, bringing down repo rate and the reverse repo rate by 100 bps each, in its effort to "arrest the downturn and revive the growth momentum."

In November, the apex bank had brought down CRR by 100 bps to 5.5 percent.

The latest move, market analysts said, would help inject Rs.20,000 crore into the financial system.