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Main Page of First Quarter Review of Annual Monetary Policy 2006-07 click here

Monetary Measures

(a) Bank Rate

65. The Bank Rate has been kept unchanged at 6.0 per cent.

(b) Reverse Repo Rate

66. In view of the current macroeconomic and overall monetary conditions, it has been decided:

To increase the fixed reverse repo rate under the liquidity adjustment facility (LAF) of the Reserve Bank by 25 basis points from 5.75 per cent to 6.00 per cent, with immediate effect.

67. The repo rate will continue to be linked to the reverse repo rate. The spread between the reverse repo rate and the repo rate has been retained at 100 basis points, as at present. Accordingly, the fixed repo rate under the LAF will be 7.00 per cent, with immediate effect.

(c) Cash Reserve Ratio

68. The cash reserve ratio (CRR) of scheduled banks is currently at 5.0 per cent. On a review of the current liquidity situation, it is felt desirable to keep the present level of CRR at 5.0 per cent unchanged.

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