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Main Page of Mid-Term Review of the Annual Policy Statement for 2006-07 click here



III. Monetary Measures

(a) Bank Rate

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

(b) Reverse Repo Rate/Repo Rate

73. It is considered desirable to keep the reverse repo rate under the LAF unchanged at 6.0 per cent.

74. In view of the current macroeconomic and overall monetary conditions, it has been decided to increase the fixed repo rate under the LAF by 25 basis points from 7.0 per cent to 7.25 per cent with immediate effect.

75. The Reserve Bank retains the option to conduct overnight repo or longer term 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

76. 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.

Third Quarter Review

77. The Third Quarter Review of the Annual Statement on Monetary Policy will be undertaken on Tuesday, January 30, 2007.


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