Present fiscal scenario to persist for a while

The RBI, on April 5, released its first bi-monthly monetary policy statement and with it, the monetary policy peport for April 2016. While the statement detailed some of the decisions, the policy report has an in-depth assessment of the current economic scenario and what to expect in the months ahead. The primary decision in the statement was to reduce the repo rate by 25 basis points from 6.75 percent to 6.5 percent. The move is seen as following the broad principles of stabilisation within the economy and the RBI is accordingly seen as normalising the policy rates to banks.

The reverse repo was adjusted to six percent, down 25 basis points. Apart from this, the minimum daily maintenance of cash reserve ratio (CRR) is also adjusted to 90 percent from the present 95 percent. The RBI has also indicated in the statement that a fresh discussion paper would be put out on how large borrowers are meeting a part of their funding requirements from markets by April 30, 2016.


Leave a Reply


Related Articles

Check Also