India's central bank, The Reserve Bank of India has announced a reduction in the Cash Reserve
Ratio (CRR) by 75 basis points on Mar 09, 2012
to boost the slowing economic growth in the country by improving liquidity.
The 75 bps cut would increase the liquidity by
Rs 48,000 in the country's economy. The additional funds in the economy would
help the economy in the coming months as the liquidity position is expected to
become tighter in mid-March due to advance tax outflows.
The RBI governor D Subbarao
has already indicated that the central
bank is considering a reversal of
the monetary policy as the inflation is falling
and the high interest
rates have affected
economic growth in the country. The fall in
inflation is due to a good kharif harvest as well as a high base. The
fall comes as a relief to the government and the central bank.
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