India central bank injects cash into financial system, cuts cash ratio (AFP)

by Salil Panchal 3 minutes ago MUMBAI (AFP) - India's central bank injected liquidity into the financial system by cutting the amount of cash commercial banks must hold in reserve, citing "a sharp deterioration" in the world financial situation. After a day of market turmoil in which Indian stocks plunged nearly six percent, the bank lowered the cash reserve ratio (CRR) -- the percentage of cash commercial banks must set aside -- by 50 basis points to 8.50 percent, as it sought to ease tight credit conditions that have hit economic demand. The Reserve Bank of India, which hitherto had made battling double-digit inflation its top aim, said ensuring enough cash in the system would take "priority in the hierarchy of policy objectives over the period ahead." "Central banks across the world have stepped up their liquidity... [read full story]