In the light of the current macroeconomic, monetary and anticipated liquidity conditions, and with a view to containing inflation expectations, it is essential to take appropriate action on an urgent basis.
This was what happened during a previous CRR hike by RBI.
On a review of current liquidity situation, it is considered desirable to increase the cash reserve ratio (CRR) of the scheduled commercial banks, regional rural banks (RRBs), scheduled state co-operative banks and scheduled primary (urban) co-operative banks by 50 basis points to 8.0 per cent in two stages, effective from specified fortnights as indicated below:
Effective date | CRR on net demand and time liabilities (per cent) |
April 26, 2008 | 7.75 |
As a result of the above increase in CRR on liabilities of the banking system, an amount of about Rs.18,500 crore of resources of banks would be absorbed.
This was what happened during a previous CRR hike by RBI.
Comments
The currency was trading at 39.365/370 per dollar, rising from the previous day’s finish of 39.42/43, and heading back towards the 9-year high of 39.27