RBI monetary policy review: Key highlights

By: | Updated: August 4, 2015 3:46 PM

Reserve Bank of India on Tuesday kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.25 per cent in its monetary policy review.

reserve bank of indiaRBI monetary policy review:The central bank also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liability.

Reserve Bank of India on Tuesday kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.25 per cent in its monetary policy review.

The central bank also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liability.

Below are the highlights from RBI’s monetary policy review

-policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.25 per cent

– cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liability (NDTL)

– continue to provide liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term repos of up to 0.75 per cent of NDTL of the banking system through auctions


– continue with daily variable rate repos and reverse repos to smooth liquidity

– Economic recovery is still work in progress

– Hardening of inflation, excluding food and fuel, is most worrisome

– Retains growth target at 7.6 per cent for 2015-16

– RBI says banks have passed on an average 0.3% interest rate cut as against its 0.75% rate cut since January

– Govt’s capital infusion in PSBs to help loan growth and transmission of interest rate cuts as well as ease liquidity

– -After strong rainfall in June, July has been below par, but overall monsoon is near normal

– Most worrisome is sustained hardening of inflation except food and fuel

Full text of RBI’s third bi-monthly policy

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