Mumbai stock index slides as India holds interest rates
City Index October 30, 2012 1:15 PM
<p>Mumbai’s stock benchmark has slipped as the central bank maintains interest rates and cuts bank reserves.</p>
Mumbai's stock exchange has slipped in trading today (October 30th) after India's central bank opted to keep interest rates on hold.
The Reserve Bank of India, however, has opted cut the amount of cash banks need to keep stored in a bid to boost lending in the country, which has experienced a recent slowdown.
It stated that slashing the money reserve ration from 4.5 per cent to 4.25 per cent would pump some 175 billion rupees (£2 billion) into the market, stimulating borrowing and therefore expansion.
This is the second time in as many months India's central bank has slashed its cash reserve ratio, with this latest move coming just in time for November's Diwali celebrations, which are historically associated with a boost in consumer expenditure.
At 08:25 GMT, the Mumbai Stock Exchange Sensitive Index had retreated by 0.8 per cent – or 151.3 points – to an index value of 18484.5 points.
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