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RBI monetary policy review: The highlights

Press Trust of India
Sep 17, 2012 at 12:23pm IST

Mumbai: The Reserve Bank of India (RBI) in its mid-quarter monetary policy review on Monday kept the repo rate unchanged but cut the Cash Reserve Ratio (CRR) by 25 basis points (bps), a move that will likely infuse Rs 17,000 crore into the economy.

The RBI will continue to target inflation in its credit policy.

Following are the highlights of the mid-quarter monetary policy review announced by the RBI on Monday:

RBI monetary policy review: The highlights

The RBI in its mid-quarter monetary policy review on Monday kept the repo rate unchanged but cut the Cash Reserve Ratio by 25 basis points.

- Cash Reserve Ratio cut by 0.25 per cent at 4.5 per cent

- Repo and reverse repo rates kept unchanged at 8 per cent and 7 per cent

- CRR cut to inject Rs 17,000 crore into banking system

- Government's recent reform initiatives to result in favourable growth-inflation dynamics

- Inflation remains a challenge; growth risks have increased

- Diesel price hike, subsidised LPG cap to put pressure on inflation

- Economic activity in July-September quarter to remain subdued

- Sustainable current account deficit to depend on fiscal consolidation.

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