Hike in CRR by 25 Basis Points; Stalemate continues in other Rates
May, 26th 2008
The Reserve Bank of India has hiked the Cash Reserve Ratio (CRR) of Banks by 25 basis points in its declaration of Annual Policy Statement for the year 2008-09. This rise in CRR takes the rate to 8.25 percent will effect from the fortnight beginning May 24, 2008.
Both the repo rate and reverse repo rate are kept unchanged. Bank rate is remained fixed at 6.0 percent.
Bank's Governor Dr. YV Reddy has given higher importance on maintaining price stability and strengthening the conditions in financial markets.
Some of the Important highlights of the policy are as follows:
GDP growth projection for the year 2008-09 is kept in the range of 8.0- 8.5 per cent.
Inflationary pressure on the country's economy is to be brought down to around 5.5 per cent in 2008-09.
Emphasis to be given on credit quality and credit delivery while pursuing financial inclusion.
Deposits are projected to increase by around 17.0 per cent during the year 2008-09.
Expansion of M3 to be moderated in the range of 16.5-17.0 per cent during 2008-09.