Joining the government in battling the skyrocketing inflation, the Reserve Bank of India (RBI) today hiked the cash reserve ratio (CRR) by 50 basis points to 8%. The ratio indicates the amount of money banks have to keep with RBI as a percentage of their liabilities (deposits).
The rate hike will be introduced in two stages. In the first stage, RBI will raise CRR by 25 basis points to 7.75% on April 26. Another 25 basis point hike will come into effect from May 10, 2008.
As a result of the increase in CRR, about Rs 18,500 crore of'banks resources would be taken out of the system, RBI said in statement.
The inflation, measured by the wholesale price index (WPI), has shot up to 7.41% in the last week of March and remained above 7% in the first week of April.
The overall impact on inflation expectations requires to be monitored and moderated, RBI said.
Liquidity has grown substantially in first two weeks of April. It is one of the factors that stokes inflation. The liquidity adjustment facility (LAF) had been in an injection mode persistently during the second half of March.
Subsequently, there was a large turnaround and an average amount of Rs 40,088 crore was absorbed through the LAF during April 3-17, 2008 as against the average daily injection of Rs. 27,385 crore during March 17-31, 2008.
RBI hikes CRR by 50 basis points
Last updated: 19 April 2008
Follow on
Google News
News posted by
CCI News Desk
Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.
Click here to Login and post comments OR
Recent News :
- CBDT Revises 'Specified Fund' Definition Under Income Tax Act, 2025
- No Proposal to Scrap LTCG Tax for Retail Investors, Govt Clarifies in Lok Sabha
- RBI Releases Draft Foreign Investment Rules 2026, Invites Public Comments Till 31st August
- CBDT Enables Foreign Assets Reporting in AIS: Taxpayers Can Now View CRS/FATCA Data Online
- RBI Enhances Fintech Oversight with SRO Framework, AI-Based Fraud Detection and Cyber Safety Measures
- UPI Crosses 55.49 Crore Users in June 2026; FY26 Transactions Hit Rs 314 Lakh Crore
- CBDT Notifies NaBFID 10-Year Zero Coupon Bond Under Income Tax Act, 2025
- ICAI Issues Public Warning After Repeated Attempts to Gain Unauthorized Access to Its Digital Systems
- Core Industries Index Overhauled with 2022-23 Base Year and Expanded Industry Coverage
- MCA Warns Stakeholders Against Fake Calls, WhatsApp Messages and Phishing Scams
Popular News
- CBDT Notifies NaBFID 10-Year Zero Coupon Bond Under Income Tax Act, 2025
- CBDT Notifies TDS Exemption for Specified Payments to IFSC Units Under Income Tax Act 2025
- CBDT Notifies Cost Inflation Index (CII) for FY 2026-27 Under Income Tax Act, 2025
- MCA Extends CCFS-2026 Deadline to 31st August 2026 Amid Data Centre Restoration
- PFMS Users Can Now Authenticate Using PAN or Bank Account Under Revised Aadhaar Rules
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
