RBI Credit Policy

First Quarter Review of Annual Monetary Policy for the Year 2008-09 -Announced on the 29th July 2008 by Dr. Y.Venugopal Reddy, Governor, Reserve Bank of India

Lending rates up 50 basis points , CRR up by 25 basis

Highlights
Bank Rate kept unchanged.

Reverse Repo Rate under LAF kept unchanged.

Repo Rate increased by 50 basis points from 8.5 per cent to 9.00 per cent.

Cash Reserve Ratio - crr to be increased by 25 basis points to 9.0 per cent with effect from the fortnight beginning August 30, 2008.

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Monetary Measures

• Bank Rate kept unchanged at 6.0 per cent.
  
  
• Reverse Repo Rate under the LAF kept unchanged at 6.00 per cent.
  
  
• The fixed Repo Rate under the LAF increased by 50 basis points from 8.5 per cent to 9.0 per cent with immediate effect.
  
  
• The Reserve Bank retains the option to conduct overnight or longer term repo/reverse repo under the LAF depending on market conditions and other relevant factors. The Reserve Bank will continue to use this flexibility including the right to accept or reject tender(s) under the LAF, wholly or partially, if deemed fit, so as to make efficient use of the LAF in daily liquidity management.
  
  
• On a review of the current liquidity situation, it is considered desirable to increase the CRR by 25 basis points to 9.0 per cent with effect from the fortnight beginning August 30, 2008.