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RBI cuts interest rate on savings

Mumbai Feb. 28 . The Reserve Bank today reduced interest rate on saving accounts offered by banks and repo rate by 0.5 per cent in view of the Finance Minister, Jaswant Singh's budgetary announcement that small savings and PPF rate would be cut by one per cent.

"The savings account rate has been cut from 4 per cent to 3.5 per cent per annum effective tomorrow in view of the current macro-economic and overall monetary conditions," the RBI Deputy Governor, Rakesh Mohan, told newspersons here.

It also cut the repo rate (repurchase rate for government securities) by 0.5 per cent at 5 per cent with effect from March 3. Thereafter, as at present, the cut-off rate for acceptance of bids for one day and 14 days repo would be decided by the RBI at each auction, he said. Detailed operational guidelines or directives would be issued separately.

PTI

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• Singh presents growth-seeking budget
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