India cuts rates to 6.75-pct amid weak credit growth, trade contraction
ECONOMYENXT – Reserve Bank of India cut its main policy rate 25 basis points in a widely expected move, amid weak bank credit growth and sharp fall in import and exports.
Loans given by key Indian banks grew 9.5 percent from a year earlier, according to RBI with loans to corporates growing 4.8 percent in the year to July, down from 10.2 percent a year earlier.
Non-food bank credit growth had slowed to 8.4 percent in the year to July 2015, from 12.6 percent a year earlier.
Only personal loans were growing at 16.8 percent up from 15.1 percent a year earlier. Deposit growth was higher at 12.1 percent.
India’s export import trade has also contracted amid credit weakness, sharply hitting transhipment volumes at Sri Lanka’s port.
India went through balance of payments problems and rates were hiked earlier. (CORRECRED – Rate cut 50bp)