RBI cuts CRR, developers welcome
Keeping an eye on the hardening inflation, the Reserve Bank of India (RBI) has cut the cash reserve ratio (CRR) by 25 bps. RBI left the key interest rate unchanged and the 0.25% reduction in CRR is done to infuse additional liquidity that will inject Rs 17,500 crore into the financial system.
Accordingly, the CRR or the portion of deposits banks have to park with the RBI now stands at 4.25% while the repo rate, at which RBI lends to the system, has been retained at 8%. The reverse repo, at which RBI absorbs excess liquidity through borrowings from banks, remains at 7%. The new rates will be effective by November 3.
Reacting to the news, Mr. Gaurav Mittal, MD, CHD Developers and Member, Governing Council, CREDAI told, “RBI has taken a cautious stance by reducing the repo rate by 0.25% but keeping the lending rates unchanged, in lieu of high inflation. We welcome the CRR cut, which we hope will help in generating liquidity. However, the entire industry has been waiting for a cut in the Repo rate which will be positive for the growth of various sectors, including real estate. We hope Reserve Bank will take cognizance if this fact and we will see a rate cut in the next policy which will provide the needed trigger and encouragement to the sector.”
cash reserve ratio(CRR), CHD Developers, CREDAI, CRR cut, Inflation, liquidity, RBI, RBI monetary policy, Repo Rate, Reserve Bank of India, reverse repo rate
