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9th August 2016 Current Affairs Questions and Answers

9th August 2016 Current Affairs MCQs, Quiz, Questions : Current Affairs for August 2016 ,  Daily Multiple Choice Questions (MCQs) for In...

RBI First Bi-monthly Monetary Policy 2016-17

RBI Governor Raghuram Rajan cut the policy rate to 6.5% taking note of falling retail inflation and the government's commitment to fiscal discipline.  On the basis of an assessment of the current and evolving macroeconomic situation, it has been decided to:

  • reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.75 per cent to 6.5 per cent;
  • reduce the minimum daily maintenance of the cash reserve ratio (CRR) from 95 per cent of the requirement to 90 per cent with effect from the fortnight beginning April 16, 2016, while keeping the CRR unchanged at 4.0 per cent of net demand and time liabilities (NDTL);
  • continue to provide liquidity as required but progressively lower the average ex ante liquidity deficit in the system from one per cent of NDTL to a position closer to neutrality; and
  • narrow the policy rate corridor from +/-100 basis points (bps) to +/- 50 bps by reducing the MSF rate by 75 basis points and increasing the reverse repo rate by 25 basis points, with a view to ensuring finer alignment of the weighted average call rate (WACR) with the repo rate;

Consequently, the reverse repo rate under the LAF stands adjusted to 6.0  per cent, and the marginal standing facility (MSF) rate to 7.0 per cent. The Bank Rate which is aligned to the MSF rate also stands adjusted to 7.0 per cent.