1. What are the main instruments? Repo Rate, Reverse Repo Rate, Bank Rate and the Cash Reserve Ration (CPR)
2. The Repo Rate: This is the rate at which RBI releases funds into the system. It was at 6 percent in 2004 but is now at 7.75 percent.
3. Reverse Repo Rate: This is the rate at which RBI sucks out excess liquidity from the system. The reverse repot rate is currently at 6 percent.
4. Bank Rate: This is the rate at which RBI lends money to banks. It is currently at 6 percent.
5. CRR: This represents the percentage of deposits that every bank has to keep with the RBI. The RBI interest on CRR balance and increases or decreases the CRR when it wants to drain or ease liquidity in the economy. The CRR is now at 6.5 percent.
6. SLR : Statutory Liquidity Ratio is the percentage of deposits that banks have to deploy in government securities and works in the same way as CRR. It is now at 25 percent and has not been changed for a decade.
Monday 21 May, 2007
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This blog is a personal blog written and edited by me. For questions about this blog, please contact me.
This blog accepts forms of cash advertising, sponsorship, paid insertions or other forms of compensation.
This blog abides by word of mouth marketing standards. We believe in honesty of relationship, opinion and identity. The compensation received may influence the advertising content, topics or posts made in this blog. The owner(s) of this blog is compensated to provide opinion on products, services, websites and various other topics. Even though the owner(s) of this blog receives compensation for our posts or advertisements, we always give our honest opinions, findings, beliefs, or experiences on those topics or products. Every effort is made to make the sponsored post identifiable but at times due to advertisers restrictions the same may not be feasible all the time.The views and opinions expressed on this blog are purely the bloggers' own. Any product claim, statistic, quote or other representation about a product or service should be verified with the manufacturer, provider or party in question.
The owner(s) of this blog would like to disclose the following existing relationships. I have a interest in real estate field which may influence the style of writing.
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