Second Quarter Review of Monetary Policy 2012-13

"First of all, on behalf of the Reserve Bank, I want to welcome you all to this Second Quarter Review of Monetary Policy for 2012-13. 2. A short while ago, we put out the Second Quarter Review. Based on an assessment of the current macroeconomic situation, we have decided to: Cut the cash reserve ratio (CRR) of scheduled banks by 25 basis points from 4.5 per cent to 4.25 per cent of their net demand and time liabilities (NDTL) effective the fortnight beginning November 3, 2012. The reduction in the CRR, will inject around `175 billion of primary liquidity into the banking system. 3. There is no change in policy interest rate. Accordingly, the repo rate under the liquidity adjustment facility remains at 8.0 per cent. 4. Consequently, the reverse repo rate under the liquidity adjustment facility (LAF), determined with a spread of 100 basis points below the repo rate, will continue at 7.0 per cent, and the marginal standing facility (MSF) rate, determined with a spread of 100 bps above the repo rate, at 9.0 per cent.