The Reserve Bank of India on Friday (December 6) slashed the cash reserve ratio (CRR) by 50 basis points (bps) to 4% from 4.5% in a bid to boost liquidity in the financial system. CRR is the percentage of a bankās total deposits that it is required to maintain in liquid cash with the RBI as a reserve. TheĀ Monetary Policy CommitteeĀ (MPC) of the RBI,Ā which met in Mumbai on Friday,Ā however, kept theĀ Repo rateĀ ā the key policy rate ā unchanged at 6.5% in a majority 4-2 decision. This is the eleventh consecutive monetary policy, over 22 months, which has left the Repo rate unchanged. Significantly, the policy panel cut the GDP growth estimate to 6.6% in FY2025 from 7.2% projected earlier, and raised the retailĀ inflationĀ forecast to 4.8% for the current fiscal from 4.5% projected earlier. The six-member MPC also decided to retain the monetary policy stance as āneutralā in the policy.
RBI keeps Repo rate unchanged
