Indian central bank holds rates steady after its Australian counterpart makes cut

The Reserve Bank of India cut the statutory liquidity ratio (SLR) - or the amount of bonds that lenders must set aside - by 50 basis points to 21.5 per cent of deposits from the two-week cycle starting on Feb 7 in a bid to spur banks to inject more c
The Reserve Bank of India cut the statutory liquidity ratio (SLR) - or the amount of bonds that lenders must set aside - by 50 basis points to 21.5 per cent of deposits from the two-week cycle starting on Feb 7 in a bid to spur banks to inject more credit into the economy. -- PHOTO: BLOOMBERG

MUMBAI (Reuters) - India's central bank held interest rates steady at 7.75 per cent on Tuesday after easing monetary policy just three weeks ago, leaving its next move probably until after the government presents its annual budget at the end of this month.

Instead, the Reserve Bank of India cut the statutory liquidity ratio (SLR) - or the amount of bonds that lenders must set aside - by 50 basis points to 21.5 per cent of deposits from the two-week cycle starting on Feb 7 in a bid to spur banks to inject more credit into the economy.

Most economists polled by Reuters had expected the RBI to keep its main lending rate steady, and reduce rates later so long as the budget, due to be unveiled by Finance Minister Arun Jaitley on Feb 28, does not disappoint.

Earlier Tuesday, the Reserve Bank of Australia cut its main cash rate to a new record low of 2.25 per cent from 2.5 per cent, in the first rate reduction since August 2013.

Australia has been hit hard by falling commodity prices and China's slowing growth.

The RBI also indicated it was concerned about rising levels of unemployment in the country.