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Highlights of RBI's third quarter monetary policy review

Knowledge resource 928 views 3 replies

CA. Dashrath Maheshwari

TaXpert

15116 Points Joined September 2007

Highlights of RBI's third quarter monetary policy review

--MAIN HIGHLIGHTS

* Repo rate unchanged at 7.75%.

* Reverse repo rate unchanged at 6.00%.

* Bank Rate unchanged at 6.00%.

* CRR unchanged at 7.50%.

* Has flexibility to change reverse repo, repo rates.

* CRR unchanged on review of current liquidity situation.

* Retain inflation aim 4.0-4.5% FY08, 3% medium term.

* GDP growth target 9- 9.5%

Replies (3)

CA S Sundararajan

CAO

536 Points Joined March 2007

Dear Sir, What is Repo rate and reverse repo rate?

CA. Dashrath Maheshwari

TaXpert

15116 Points Joined September 2007

Reverse repo rate signifies the rate at which the central bank absorbs liquidity from the banks, while repo signifies the rate at which liquidity is injected. The rates are determined by the central bank i.e RBI.

CA S Sundararajan

CAO

536 Points Joined March 2007

Thank you sir,

1.Here liquidity means bonds purchased from RBI agts the Cash holdings of the Banks or somthing else?

2.What is Federal Reserve Rate?and how it will determine the performance of market