Saturday 11 October 2008

RBI cuts CRR by 150 bps

In an anticipated move, the Reserve Bank of India, or RBI, has cut the cash reserve ratio, or CRR, by 150 basis points to 7.5% with effect from tomorrow in a bid to infuse liquidity into the markets.

On October 6, the RBI had cut the CRR by 50 bps to 8.5%. Today's 150-bps cut includes October 11's cut. The cut will inject liquidity into the system to the tune of Rs 60,000 crore.

Nilesh Shah of Envision Capital said, “The CRR cut is definitely a positive move, which is going to soothe some liquidity fears. The stock market also needs liquidity and this (the rate cut) will help to some extent. Whether this is going to help us beyond a day or beyond an intra-day basis is something that remains to be seen.”

Source: Moneycontrol

Posted by Harsh at 00:20

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