Annual Policy Statement for the Year 2010-11- 20th April 2010
Part A. Monetary Policy
IV. Monetary Measures
42. 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:
43. The Bank Rate has been retained at 6.0 per cent.
44. It has been decided to:
increase the repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 5.0 per cent to 5.25 per cent with immediate effect.
Reverse Repo Rate
45. It has been decided to:
increase the reverse repo rate under the LAF by 25 basis points from 3.5 per cent to 3.75 per cent with immediate effect.
Cash Reserve Ratio
46. It has been decided to:
increase the cash reserve ratio (CRR) of scheduled banks by 25 basis points from 5.75 per cent to 6.0 per cent of their net demand and time liabilities (NDTL) effective the fortnight beginning April 24, 2010.
47. As a result of the increase in the CRR, about Rs. 12,500 crore of excess liquidity will be absorbed from the system.
48. The Reserve Bank will continue to monitor macroeconomic conditions, particularly the price situation, closely and take further action as warranted.
49. The expected outcomes of the actions are:
(i) Inflation will be contained and inflationary expectations will be anchored.
(ii) The recovery process will be sustained.
(iii) Government borrowing requirements and the private credit demand will be met.
(iv) Policy instruments will be further aligned in a manner consistent with the evolving state of the economy.
Click Here For Highlights of Annual Policy Statement for the Year 2010-11
Click Here For Macro economic and Monetary Developments : 2009-10