Rajan Raises the Repo Rate and Reduced the MSF in his first Monetary Policy Review

 Rajan Raises the Repo Rate and Reduced the MSF in his first Monetary Policy Review

To fight the inflation, the new RBI Governor Mr. Raghuram Rajan reduced the MSF rate by 75 basis points to 9.5% from 10.25% and increased the key repo rate to 7.5% he kept CRR unchanged in his first monetary policy review after taking over as the RBI governor .  This measure was taken to tighten liquidity and arrest volatility in the foreign exchange market. The RBI also reduced the minimum daily maintenance of the cash reserve ratio from 99% of the requirement to 95%. RBI said that any further change in the minimum daily maintenance of the CRR is not contemplated.

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