The RBI on Oct. 30, 2012 reviewed the monetary policy in context of inflation.
It decided to keep key lending rates unchanged and reduced Cash Reserve Ratio (CRR) for banks by 0.25 changing it from 4.5% to 4.25%.
This decision will release Rs. 17000 crores in banking system.
CRR is a statutory reserve maintained by other banks with RBI in cash and equivalent securities.
Is this stance of RBI good for slowing Indian Economy?
RBI has given preference to controlling inflation rate over Growth. It looks correct from the view point of common public but industry demands rate cut in interest rates.RBI seems failed in both controlling inflation and providing loans to industries and public on cheaper rates. However there is nothing much RBI can do to control inflation.
What is more important in currect scenario???
-push growth or
-control inflation
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