Monday, January 15, 2007

CRR hiked by 0.5%

The Reserve Bank of India (RBI) announced a 50 basis point hike in the Cash Reserve Ratio (CRR) from 5% to 5.5% in two phases. CRR is the percentage of banks’ net demand and time liabilities which include money from deposits and bonds raised by banks with RBI. A hike in CRR means banks have to park more money with RBI and will be left with less money to lend.


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