Money markets passing on rate cuts: Reserve Bank of India

Mumbai

SLIDING money-market rates have been hailed by Reserve Bank of India governor Raghuram Rajan as evidence his interest-rate cuts can revive the economy while banks fail to pull their weight.

One-year commercial paper rates dropped 72 basis points in 2015 to 8.30 per cent on Monday, the lowest since 2010. By contrast, State Bank of India, the nation's largest lender, cut its base rate just 30 basis points. The total amount of commercial paper outstanding was 2.71 trillion rupees (S$58 billion) at the end of June, up 30 per cent from December, the latest central bank data show.