The Reserve Bank of India, or RBI, has cut the cash reserve ratio, or CRR, by 50 bps to 8.5% with effect October 11. The cut will infuse Rs 20,000 crore into the system.
CRR is the portion of funds that banks have to park with the central bank.
“The CRR cut is ad hoc and temporary in nature. Liquidity management will be priority amid global uncertainty. The major priority of policy will be to anchor inflation expectations. We will continue to review the CRR situation on a continuous basis,” it said.
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