RBI hikes CRR to 7.5%; other key rates unchanged
The RBI Governor, YV Reddy announced the credit policy in Mumbai today.
RBI has hiked the CRR by 50 bps to to 7.5% from 5%. However, the other key rates including the repo and reverse repo rates have remained unchanged.
The RBI's has raised the cash reserve ratio given the persistent rise in capital flows, but has otherwise left other policy rates unchanged. The central bank's main message is that the economy is in fine shape – agriculture is above trend, industry and services may slacken just a bit. So the GDP target remains at 8.5% and inflation at 5%
RBI has hiked the CRR by 50 bps to to 7.5% from 5%. However, the other key rates including the repo and reverse repo rates have remained unchanged.
The RBI's has raised the cash reserve ratio given the persistent rise in capital flows, but has otherwise left other policy rates unchanged. The central bank's main message is that the economy is in fine shape – agriculture is above trend, industry and services may slacken just a bit. So the GDP target remains at 8.5% and inflation at 5%
crr is cash reserve ratio...rbi "takes away" a certain amount of capital reserve from the banks....which means the banks will now have 0.5% cash less to work with.
posted by amey316 @ 12:16 AM
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