…….Even after cutting CRR twice, the Reserve Bank of India (RBI) has not yet pared its policy rate—something that doesn’t happen too often. This marks quite a shift in the Indian central bank’s monetary policy—CRR has become an independent tool for liquidity management. The reason behind the CRR cut is acute cash crunch in the system. The daily cash crunch, which peaked at Rs. 1.90 trillion in early March, could have risen further by this time on account of advance tax outflow had RBI not gone for CRR cut ahead of its quarterly review of monetary policy……..
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