RBI cuts cash reserve ratio by 50 bps

Reuters
Posted: 2008-10-06 18:56:35+05:30 IST
Updated: Oct 06, 2008 at 1856 hrs IST

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The Reserve Bank of India (RBI) on Monday said it was cutting the cash reserve ratio (CRR) for banks by half a percentage point to 8.5 percent, effective from Oct. 11, to alleviate pressures caused by the global financial crisis.

The measure would release 200 billion rupees ($4.2 billion) into the banking system, the RBI said in a statement released after market hours.

The CRR is the proportion of deposits banks need to keep with the central bank.

The measure was ad-hoc and temporary in nature, and would be reviewed on a continuous basis and liquidity management would continue to receive priority in the monetary policy, the RBI said.

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RBI said it was cutting the cash reserve ratio (CRR) for banks by half a percentage point to 8.5%.