RBI Raises Cash Reserve Ratio by 50 Bps to 4.5% from May 21
The decision was announced by RBI Governor Shaktikanta Das after an off-cycle meeting of the rate-setting panel -- Monetary Policy Committee (MPC).
Mumbai, May 4: The Reserve Bank on Wednesday announced a hike in cash reserve ratio (CRR) by 50 basis points to 4.5 per cent, effective May 21, which will take out Rs 87,000 crore liquidity from the system.
The decision was announced by RBI Governor Shaktikanta Das after an off-cycle meeting of the rate-setting panel -- Monetary Policy Committee (MPC). RBI Hikes Interest Rate by 40 Bps to 4.40% to Contain Inflation.
CRR is a percentage of a bank's total deposits that it needs to maintain as liquid cash. The MPC also decided to raise the repo rate or the short-term lending rate by 40 basis points to 4.4 per cent.