MUMBAI: Reserve Bank of India Deputy Governor Subir Gokarn said the cash reserve ratio (CRR) cut is a liquidity action while maintaining the anti-inflationary stance. The RBI cut CRR, the share of deposits banks must hold with the central bank, for banks by 50 basis points to 5.50 per cent on Tuesday to ease tight liquidity, signalling a policy shift towards reviving growth after nearly two years of fighting inflation. With core inflation still stubbornly high, the Reserve Bank of India, as expected, left its policy repo rate unchanged at 8.50 per cent for the second consecutive review.
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