Industry body Confederation of Indian Industry said with the government having announced a clear road map for fiscal consolidation and non-food inflation demonstrating a secular decline, conditions are conducive for RBI to have intervened with a repo and cash reserve ratio reduction.
The RBI has, however, left the cash reserve ratio or bank rate, which is the amount of cash that banks have to park with the central bank to maintain prudential norms, unchanged at 6 per cent.
The bank kept cash reserve ratio unchanged at 6 per cent.
Prime Minister's Economic Advisory Council Chairman C Rangarajan on Tuesday called RBI's policy action a "wise decision". The liquidity easing measures will have an impact on interest rates, he said.
What impact will this hike in RBI rates have on the banks and industries? What do the bankers have to say? How is India Inc reacting to the rate change?
The Reserve Bank of India (RBI) may not go in for key policy rate cuts in its quarterly policy review slated for January 23, said a senior finance ministry official.
The central bank kept cash reserve ratio unchanged at 4 per cent.
ICICI Bank Chairman K V Kamath on Thursday disagreed with the suggestion of SBI chief Pratip Chaudhuri that RBI should scrap CRR, saying it is part of the monetary policy and no issue can be made of it.
The banking system neared Rs 1.47 trillion of liquidity deficit on Monday, the highest since January 29, 2020, when the banking system liquidity deficit went up to Rs 3 trillion. The Reserve Bank of India (RBI) injected Rs 1.47 trillion on Monday and Rs 1.46 trillion on Tuesday. Market participants say that the disbursement of Rs 25,000 crore as the second tranche of incremental cash reserve ratio (I-CRR) will not be enough, and the liquidity might tighten further to Rs 2 trillion in short term due to tax outflows and arrival of the festival season.
The Reserve Bank will present the mid-quarter Monetary Policy Review on Tuesday.
The Reserve Bank of India has kept all key interest rates unchanged in its mid-term credit policy review announced on Monday.
Interest rates are not expected to go up immediately even as the Reserve Bank of India on Tuesday announced a fresh 25-basis-point hike in the cash reserve ratio (CRR), the amount of cash banks must keep with the central bank, in its Annual Policy Statement for 2008-09. The impact is, however, expected to be marginal as bankers talked about keeping lending rates stable for the time being due to sufficient liquidity in the system. The move will absorb around Rs 8,000 crore.
Snapping its six-day losing streak both benchmarks rallied over 1% after RBI kept key policy rates unchanged.
Banks to lower rates shortly; RBI cuts CRR by 25 bps and signals easier policy in October
Banks to lower rates shortly; RBI cuts CRR by 25 bps and signals easier policy in October
Industry houses are emphatic with the RBI pruning repo rate and CRR by 0.25 per cent each after a long nine months in its third quarter monetary policy review.
Hailing Reserve Bank's decision to cut key rates, Plan panel on Tuesday said it would boost investments and hoped the measures will have significant effect on long term borrowing rates.
HDFC chairman Deepak Parekh on Monday said harmonisation of rules between banks and non-banks which reduces the regulatory arbitrage was one of the key factors which influenced the decision for merger between the largest home financier and HDFC Bank. Parekh, who said the merger discussions have happened over the last three weeks, noted that requirements like non performing asset recognition being at par and size-based regulations for non-bank finance companies are among the changes in landscape. Addressing a press conference after the surprise announcement earlier in the day, Parekh said the last three years have seen harmonisation in the regulations which reduce the "regulatory arbitrage" of running a separate home finance company.
The Reserve Bank of India on Thursday hiked the cash reserve ratio (CRR), the amount of depositors' money that banks need to park with it, by half a per cent to tighten money supply, as part of concerted efforts with the government to ease inflation.The hike, which would take CRR to 8 per cent, will come into effect in two tranches of 0.25 per cent on April 26 and May 10.
While the rupee snapped a four-session downslide, it rupee could not cement intra-day gains as RBI kept short-term lending (repo) and cash reserve ratio unchanged, forex dealers said.
The Reserve Bank has kept the key policy rates unchanged in its Mid-Quarter Monetary Policy Review.
Demonetisation of the high value currency notes of Rs 500 and Rs 1,000 did not have any discernible impact on currency in circulation (CIC) in the country, which has soared by almost 83 per cent since its announcement on November 8, 2016. The Supreme Court on Monday upheld the decision of the government on demonetisation. On November 8, 2016 Prime Minister Narendra Modi had announced demonetisation of old Rs 1,000 and Rs 500 banknotes and one of the key objectives of the unprecedented decision was to promote digital payments and curb black money flows.
Of the 15 participants, 7 expect CRR cut, only one sees repo rate reduction.
They feel reducing policy rates will help to boost production and revive the economy.
High inflation continues to be an obstacle in lowering policy rates as of now.
The central bank held the cash reserve ratio at 4 per cent.
SBI too rules out cut in base rate in short term, to launch concessional schemes.
Chidambaram welcomes CRR cut as a good small step forward.
Some reactions to RBI's monetary policy announced on Monday.
Real estate developers said on Tuesday that RBI's decision to cut cash reserve ratio will help improve the liquidity position of various sectors, including realty, but felt that interest rates should be brought down to boost housing demand.
The Reserve Bank of India has been actively doing OMOs or buyback of government bonds to manage liquidity in the system over the last few months.
The Reserve bank of India has kept the repo rate and reverse repo rates unchanged in its mid-quarter review of monetary policy announced on Thursday.
The Reserve Bank has decided to keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of their net demand and time liabilities and keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.25 per cent.
To ease liquidity situation, the Reserve Bank today slashed CRR -- the portion of deposits banks are required to keep with the central bank -- by 0.75 percentage points, a step that will infuse Rs 48,000 crore (Rs 480 billion) into the economy.
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