RBI monetary policy review: Experts hope Raghuram Rajan announces CRR cut

By: |
New Delhi | Updated: April 7, 2015 10:46:25 AM

While there are no expectations for a repo rate cut in Governor Raghuram Rajan-led Reserve Bank of India’s annual monetary policy on Tuesday...

RBI monetary policy, RBI monetary policy review, rbi crr rate, rbi crr rate 2015, cash reserve ratio, RBI, RBI RBI monetary policy review, RBI policy review, RBI policy review today, RBI rate cut, review of monetary policy, RBI monetary policy 2015, rbi monetary policy rates, cash reserve ratio, CRR rate cut, Raghuram Rajan, Reserve Bank of India, business, economyWhile there are no expectations for a repo rate cut in Raghuram Rajan-led RBI’s annual monetary policy, analysts don’t rule out the possibility of a reduction in cash reserve ratio. (Express photo)

While there are no expectations for a repo rate cut in Governor Raghuram Rajan-led Reserve Bank of India’s (RBI) annual monetary policy on Tuesday, analysts don’t rule out the possibility of a reduction in cash reserve ratio (CRR) to make the cost of funds cheaper and steps to speed up transmission of rate cuts by banks to their customers.

* 50 basis points is the reduction in repo rate by the Reserve Bank of India in two stages — 25 bps each on January 15 and March 4 — to 7.50% on the back of softening inflation and the government’s commitment to continue with the fiscal consolidation programme.

* None of the leading banks have passed on the 50 bps repo rate cut to their customers.

RBI monetary policy, RBI monetary policy review, rbi crr rate, rbi crr rate 2015, cash reserve ratio, RBI, RBI RBI monetary policy review, RBI policy review, RBI policy review today, RBI rate cut, review of monetary policy, RBI monetary policy 2015, rbi monetary policy rates, cash reserve ratio, CRR rate cut, Raghuram Rajan, Reserve Bank of India, business, economy

* 4% is the current CRR requirement — portion of deposits to be kept with the RBI — for banks.

* 9.4% is the bank credit growth in February as against 14.7% a year ago, indicating sluggish demand for loans.

What’s worrying the RBI?
* Inflation has bounced off November’s low of 3.3% to 5.4% in February 2015, but still below January 2016 target

* The recent bout of unseasonal weather developments and damage to select winter crops might stoke worries over food inflation

* Global fuel prices have also bottomed out in recent weeks, limiting further downside in inflation prints

Do you know What is Disinvestment, Long Term Capital Gains Tax, Repo Rate, Repo Linked Lending Rate (RLLR), Wholesale Price Index (WPI)? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Next Stories
1FPIs on the mat again as Arun Jaitley, Shaktikanta Das say no relief
2Deposit growth at 51-year low
3Nuclear ties top on agenda of PM Narendra Modi’s tour