Part I. Annual Statement on Monetary Policy for the Year 2008-09
III. Monetary Measures
(a) Bank Rate
98. The Bank Rate has been kept unchanged at 6.0 per cent.
(b) Repo Rate/Reverse Repo Rate
99. The repo rate under the LAF is kept unchanged at 7.75 per cent.
100. The reverse repo rate under the LAF is kept unchanged at 6.0 per cent.
101. The Reserve Bank has the flexibility to conduct repo/reverse repo auctions at a fixed rate or at variable rates as circumstances warrant.
102. The Reserve Bank retains the option to conduct overnight or longer term repo/reverse repo under the LAF depending on market conditions and other relevant factors. The Reserve Bank will continue to use this flexibility including the right to accept or reject tender(s) under the LAF, wholly or partially, if deemed fit, so as to make efficient use of the LAF in daily liquidity management.
(c) Cash Reserve Ratio
103. Scheduled banks are required to maintain cash reserve ratio (CRR) of 7.75 per cent with effect from the fortnight beginning April 26, 2008 and 8.0 per cent with effect from the fortnight beginning May 10, 2008 as announced on April 17, 2008. On a review of the evolving liquidity situation, it is considered desirable to increase the CRR by 25 basis points to 8.25 per cent with effect from the fortnight beginning May 24, 2008.
First Quarter Review
104. The First Quarter Review of this part of the Annual Policy Statement for the year 2008-09 will be announced on July 29, 2008.
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