Tags : RBI, CRR cut, repo rate cut,
Posted: Saturday , Nov 01, 2008 at 1450 hrs IST Mumbai, November 1::
RBI effected yet another 100 basis points cut in CRR and a 0.5% reduction repo rate.
Home, consumer and corporate loan rates are likely to ease in the near future, with RBI announcing a slew of monetary measures including a one per cent cut in cash reserve and stautory liquidity ratios besides a 0.5 per cent cut in its short term lending rate.
The CRR, the percentage of amount banks are required to keep with the apex bank, has been cut in two tranches of 0.5 per cent effective from October 25 and November 8 to infuse Rs 40,000 crore in to the banking system.
The central bank had already cut CRR by 2.5 per cent to 6.5 per cent last month injecting Rs one lakh crore in to the system. With this cut, the apex bank could have injected Rs 1.4 lakh crore through CRR cut which is now pegged at 5.5 per cent.
The SLR, which is the amount banks have to keep with the RBI in the form of cash, gold or approved securities, was cut temporarily by one per cent earlier to 24 per cent and this cut has been made permanent effective from Novebmber 8.
The RBI also cut its key short term repo rate, the rate at which Reserve Bank lends overnight funds to bank, by 0.5 per cent to 7.5 per cent. Last month repo rate was cut by 1 per cent from 9 per cent to 8 per cent.
With today's measures along with several monetary steps taken last month, the apex bank has so far injected over Rs 2.5 lakh crore in to the system.
... contd.
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