Third Quarter Review of Monetary Policy 2009-2010
-29th January 2010
IV. Monetary Measures
37. On the basis of the current assessment and in line with the policy stance as outlined in Section III, the Reserve Bank announces the following policy measures:
38. The Bank Rate has been retained at 6.0 per cent.
39. The repo rate under the Liquidity Adjustment Facility (LAF) has been retained at 4.75 per cent.
Reverse Repo Rate
40. The reverse repo rate under the LAF has been retained at 3.25 per cent.
Cash Reserve Ratio
41. It has been decided to:
increase the cash reserve ratio (CRR) of scheduled banks by 75 basis points from 5.0 per cent to 5.75 per cent of their net demand and time liabilities (NDTL) in two stages; the first stage of increase of 50 basis points will be effective the fortnight beginning February 13, 2010, followed by the next stage of increase of 25 basis points effective the fortnight beginning February 27, 2010.
42. As a result of the increase in the CRR, about Rs. 36,000 crore of excess liquidity will be absorbed from the system.
43. The Reserve Bank will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted.
44. The expected outcomes of the actions are:
(i) Reduction in excess liquidity will help anchor inflationary expectations.
(ii) The recovery process will be supported without compromising price stability.
(iii) The calibrated exit will align policy instruments with the current and evolving state of the economy.
Monetary Policy 2010-11
45. The Monetary Policy for 2010-11 will be announced on April 20, 2010.
Third Quarter Review of Monetary Policy 2009-2010... click here
Highlights of 3rd Quarter Review of Monetary Policy 2009-2010... click here
RBI CREDIT AND MONETARY POLICIES (1999-2010)... click here