RBI Governor Raghuram Rajan announced his maiden monetary policy. For our visitors we are providing here the important highlights of this review. Questions are likely to be asked in upcoming exams and interviews on this Mid-Quarter Monetary Policy Review.
- The Reserve Bank of India (RBI) on 20 September 2013 increased the repo rate or the short term lending rate by 25 basis points to 7.5 per cent from 7.25 per cent with immediate effect. This means that the Repo rate has been increased by 0.25 percent.
- Marginal Standing Facility (MSF) rate reduced by 0.75 per cent to 9.5 per cent. The MSF rate is the one at which the other banks can borrow from the Central Bank.
- The cash reserve ratio (CRR) remained unchanged at 4 percent. The cash reserve ratio (CRR) is the portion of the deposits which the banks need to maintain in cash with the RBI. The RBI, in the meanwhile, also brought down the minimum daily maintenance of CRR from 99 percent of the requirement to 95 percent with effect from 21 September 2013.