Reserve Bank of India (RBI) Governor Raghuram Rajan raised repo rate by 25 bps to 7.25 percent in the second quarter monetary policy review. The apex bank also rolled back MSF rate by 25 bps to 8.75 percent thus restoring "normalcy" and left CRR unchanged at 4 percent.
The RBI also increased the liquidity provided through term repos of 7-day and 14-day tenor from 0.25 percent of NDTL of the banking system to 0.5 percent with immediate effect.
Consequently, the reverse repo rate under the LAF stands adjusted to 6.75 percent and the Bank Rate stands reduced to 8.75 percent with immediate effect.
With these changes, the MSF rate and the Bank Rate are recalibrated to 100 basis points above the repo rate. Repo rate is the effective policy rate that decides lending rates in the economy.
Consensus on the street pointed to a 25 bps rate hike to 7.75 percent and rolling back of emergency measures applied to tame the rupee.
In his previous monetary policy review, announced weeks after assuming office as RBI governor, Rajan stunned market by raising repo rates
The RBI has been struggling for a year now to bring down inflation which has remained stubbornly high despite all possible measures, which led to slowdown in growth. Meanwhile, annual food inflation touched its highest point since mid-2010 to 18.4 percent in September.
The RBI also increased the liquidity provided through term repos of 7-day and 14-day tenor from 0.25 percent of NDTL of the banking system to 0.5 percent with immediate effect.
Consequently, the reverse repo rate under the LAF stands adjusted to 6.75 percent and the Bank Rate stands reduced to 8.75 percent with immediate effect.
With these changes, the MSF rate and the Bank Rate are recalibrated to 100 basis points above the repo rate. Repo rate is the effective policy rate that decides lending rates in the economy.
Consensus on the street pointed to a 25 bps rate hike to 7.75 percent and rolling back of emergency measures applied to tame the rupee.
In his previous monetary policy review, announced weeks after assuming office as RBI governor, Rajan stunned market by raising repo rates
The RBI has been struggling for a year now to bring down inflation which has remained stubbornly high despite all possible measures, which led to slowdown in growth. Meanwhile, annual food inflation touched its highest point since mid-2010 to 18.4 percent in September.
Reserve Bank of India (RBI) Governor Raghuram Rajan raised repo rate by
25 bps to 7.25 percent in the second quarter monetary policy review. The
apex bank also rolled back MSF rate by 25 bps to 8.75 percent thus
restoring "normalcy" and left CRR unchanged at 4 percent.
The RBI also increased the liquidity provided through term repos of
7-day and 14-day tenor from 0.25 percent of NDTL of the banking system
to 0.5 percent with immediate effect.
Consequently, the reverse repo rate under the LAF stands adjusted to
6.75 percent and the Bank Rate stands reduced to 8.75 percent with
immediate effect. With these changes, the MSF rate and the Bank Rate are
recalibrated to 100 basis points above the repo rate.
Repo rate is the effective policy rate that decides lending rates in the
economy.
Consensus on the street pointed to a 25 bps rate hike to 7.75 percent
and rolling back of emergency measures applied to tame the rupee. In his
previous monetary policy review, announced weeks after assuming office
as RBI governor, Rajan stunned market by raising repo rates
The RBI has been struggling for a year now to bring down inflation which
has remained stubbornly high despite all possible measures, which led
to slowdown in growth. Meanwhile, annual food inflation touched its
highest point since mid-2010 to 18.4 percent in September.
Read more at: http://www.moneycontrol.com/news/economy/rbi-hikes-repo-rate-cuts-msf-by-25-bps-each-crr-unchanged_978635.html?topnews=1&utm_source=ref_article
Read more at: http://www.moneycontrol.com/news/economy/rbi-hikes-repo-rate-cuts-msf-by-25-bps-each-crr-unchanged_978635.html?topnews=1&utm_source=ref_article
No comments:
Post a Comment