RBI releases Rs. 60,000 cr by slashes SLR

RBI releases Rs. 60,000 cr by slashes SLR

• RBI cut the Statutory Liquidity Ratio (SLR) by 1% point from 24 % to 23 % which is expected to provide liquidity of around Rs.60,000 crore in economy.

• RBI kept the key indicative policy rates unchanged while it slashed the gross domestic product (GDP) forecast for the current financial year from 7.3 % to 6.5 % and raised the inflation forecast from 6.5 % to 7 %.

• Today India is facing a problem like slow growth rate and high inflation.

• The key indicative policy rates like Repo Rate is at 8%, Cash Reserve Ratio (CRR) is at 4.75% unchanged. Repo rate is the rate at which banks borrow money from the central bank. CRR is the portion of deposits banks have to keep with the central bank in cash.

• The reduction of SLR is expected to ensure that liquidity pressures do not restrain the flow of credit to the productive sectors of the economy. This move will allow banks to shift their portfolio in favour of the private sector