gundeep
18-04-2008, 08:14 AM
The Reserve Bank of India has hiked CRR by 50 bps to 8% .The CRR hike is effective in two stages on April 26 and May 10 of 25 basis points each. It will suck out Rs 18,500 crore from the banking system.The move comes just a day after Reserve Bank of India (RBI) Governor Y.V Reddy said in New York that he would take necessary steps to rein in inflation which is at 7.14 percent for the week ending April 5.
The CRR is the minimum amount of cash which commercial banks have to hold and this instrument is often used by central banks to bring down inflation by checking the money supply.
The CRR is the minimum amount of cash which commercial banks have to hold and this instrument is often used by central banks to bring down inflation by checking the money supply.