Fintotal News Analysis | CRR Reduced in RBI's Monetary Policy Review
CRR Reduced in RBI's Monetary Policy Review
Ruby Jacob, 17 Sep 2012

As widely anticipated RBI cut CRR by 25 basis points in its September mid-quarter monetary policy review today. Repo rate has been kept unchanged at 8%. The focus of RBI's monetary policy remains to tackle inflation. According to RBI inflationary pressures are still high.

RBI's move brings CRR down to 4.5% from 4.75% and will pump liquidity of Rs 170 billion into the banking system. Cash Reserve Ratio (CRR) is the percentage of bank's funds which must be mandatorily kept in cash with the RBI on a daily basis. It is computed on a fortnightly basis. New CRR will apply from the fortnight beginning 22 September.

Headline inflation has been close to 7.5% from the start of the current financial year. Government's recent hike in diesel price by Rs 5 per litre and rationalization of subsidy in LPG cylinders would spike headline inflation in the short term. But in the medium term this is likely to strengthen fundamentals. 

Get the all financial products under one roof only at

you will NEVER GO WRONG with us!

Unbiased . Best Deals . Appropriate Products . No Mis-selling