RBI chief says reserve ratios may need to come down

13 August, 2013

The Reserve Bank of India (RBI) chief Duvvuri Subbarao said on Tuesday that “perhaps” there was a need to reduce the reserves that banks have to set aside via the cash reserve or the statutory liquidity ratios.

The cash reserve ratio, or the amount of cash lenders must deposit with the Reserve Bank of India, stands at a record low of 4 percent. Meanwhile, the statutory liquidity ratio, which includes securities such as government bonds, stands at 23 per cent.

Subbarao was speaking at a banking conference in Mumbai.

The RBI has recently tightened monetary conditions by raising short-term interest rates and draining cash in a bid to defend the rupee, but the currency has weakened nonetheless, sparking concerns the central bank would need to either raise the CRR or raise the key repo rate.


Leave Your Comment
Rupee Opens Higher On RBI Policy Shift

Rupee Opens Higher On RBI Policy Shift

Reuters 5 years ago
The rupee opened stronger on Wednesday on expectations for continued foreign fund inflows after the Reserve Bank of India (RBI) signalled a shift in its...
Subbarao overruled panel view on rate action in May

Subbarao overruled panel view on rate action in May

Reuters 4 years ago
Reserve Bank of India (RBI) Governor Duvvuri Subbarao went against the suggestion of a majority of external members of the central bank’s monetary policy committee...
RBI Cuts CRR By 50 Bps; Interest Rates Unchanged

RBI Cuts CRR By 50 Bps; Interest Rates Unchanged

Reuters 5 years ago
The Reserve Bank of India cut cash reserve requirements for banks by 50 basis points on Tuesday to ease tight liquidity, signalling a policy shift...
No Comments

RBI chief says reserve ratios may need to come down

Powered by WordPress.com VIP