Monetary Measures of the Indian Reserve Bank

By: EconomyWatch   Date: 30 June 2010

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Monetary Measures of the Indian Reserve Bank
III. MonetaryMeasures

(a) Bank Rate

49. In the annualpolicy Statement of April 2005, the Bank Rate was kept unchanged at 6.0 percent. On a review of the macroeconomic developments, it is considered desirableto leave the Bank Rate unchanged at 6.0 per cent.

(b) Reverse RepoRate

50. In view of thecurrent macroeconomic and overall monetary conditions, it has been decided:

For increasing thefixed reverse repo rate under the liquidity adjustment facility (LAF) of theReserve Bank by 25 basis points with effect from October 26, 2005 to 5.25 percent from 5.0 per cent.

51. The repo ratewill continue to be linked to the reverse repo rate. The spread between thereverse repo rate and the repo rate has been retained at 100 basis points, asat present. Accordingly, the fixed repo rate under LAF will be 6.25 per cent,effective October 26, 2005.

(c) Cash ReserveRatio

52. The cash reserveratio (CRR) of scheduled banks is currently at 5.0 per cent. While the ReserveBank continues to pursue its medium-term objective of reducing the CRR to thestatutory minimum level of 3.0 per cent, on a review of the current liquiditysituation, it is felt desirable to keep the present level of CRR at 5.0 percent unchanged.

Third Quarter Review

53. The ThirdQuarter Review of this part of the annual policy Statement will be undertakenon Tuesday, January 24, 2006.

 


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