Cash Reserve Ratio Remain Unchanged in RBI
Tuesday, January 27, 2009 at 3:38 pm under India News Cash Reserve Ratio Remain Unchanged in RBI
New Delhi: In line with the expectations, the Reserve Bank of India (RBI) on Tuesday, while announcing a review of its monetary policy, left key interest rates and the Cash Reserve Ratio (CRR) unchanged. Analysts had predicted that the RBI would not go in for cuts in repo and reverse repo rates (short-term lending and borrowing rates) in its quarterly policy review, taking into account the latest developments in international and domestic markets.
Earlier on January 4, the RBI had reduced the repo rate by 100 basis points to 5.5 percent, the reverse repo rate by 100 basis points to 4 percent, and the CRR (the amount banks are required to park with the RBI) from 5.50 percent to 5 percent. With no change this quarter, these rates will stand true for now.
Further, the RBI in its monetary policy review stated that inflation was expected to moderate further to below 3 percent by March-end.
It also reduced the current fiscal GDP growth projection to 7 percent from 7.5 to 8 percent.
The January 4 rate cuts were aimed at injecting more funds into the system and signalling a softer interest rate regime to boost economic growth.
The RBI has been reducing key policy rates since October to neutralise the impact of the global financial meltdown on the Indian economy. While the repo rate and the CRR were at nine percent in October, the reverse repo rate was at 6 percent.
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