News | Tuesday, 04 November 2008

More pressure on ECB, Bank of England to cut interest rates

British and European Union (EU) monetary policy-makers were facing mounting pressure to slash interest rates to historic lows.
The Bank of England’s monetary policy committee and the European Central Bank’s governing council meet this week amid a clamour for rate cuts unprecedented in their brief histories.
Surveys suggested economists expected cuts of at least half a point in the Bank of England rate to 4 per cent and the ECB rate to 3.25 per cent.
On Saturday, the Reserve Bank of India took emergency action to pump liquidity into the country’s banking system amid concerns that the global financial crisis would cut significantly India’s economic growth.
The RBI cut the repo rate by 50 basis points to 7.5 per cent, lowering the main short-term interest rate for the second time in two weeks.
It also reduced the cash reserve ratio, the amount of money banks have to hold with the central bank, by 100 basis points to 5.5 per cent, releasing about Rs 400 billion (USD 8 billion) into the banking system.

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More pressure on ECB, Bank of England to cut interest rates