21st April 2009

RBI Annual Policy Statement for the Year 2009-10

• Repo rate under the Liquidity Adjustment Facility (LAF) reduced by 25 basis points from 5.0 per cent to 4.75 per cent with immediate effect
• Reverse repo rate under the LAF reduced by 25 basis points from 3.5 per cent to 3.25 per cent with immediate effect.
• The Bank Rate has been retained unchanged at 6.0 per cent.
• The cash reserve ratio (CRR) of scheduled banks has been retained unchanged at 5.0 per cent of net demand and time liabilities (NDTL).
• GDP growth for 2008-09 is projected to be in the range of 6.5 to 6.7 per cent
  

27th April 2009

Third-Quarter Review of Monetary Policy for the Year 2008-09

• The repo and reverse repo rate have been kept unchanged at 5.5% and 4% respectively.
• The cash reserve ratio (CRR) of scheduled banks kept unchanged at 5% of net demand and time liabilities (NDTL). SLR remains at 24%.

  
  

07th Jan 2009

Satyam chairman quits, admits to fraud

• Satyam Computer on Wednesday plunged into a deep crisis, as B Ramalinga Raju resigned as its chairman after admitting to major financial wrong-doings.
• Inflated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5,361 crore reflected in the books.
• Accrued interest of Rs 376 crore which is non-existent
• An understated liability of Rs 1230 crore
• An overstated debtors position of Rs 490 crore
• A revenue of Rs 2112 crore against Rs 2700 crore shown for the September quarter
• An operating margin of Rs 61 crore (3 per cent of revenue) against Rs 649 crore (24 per cent of revenue) shown

02nd Jan 2009

RBI cuts key interest rates again

• The apex bank has cut CRR by 50 basis points to five per cent
• Short-term lending (repo) rate by 100 basis points to 5.5 per cent
• Short-term borrowing (reverse repo) rate by similar percentage points at 4 percent.
• Today's announcement comes 25 days ahead of the third quarterly review of credit policy scheduled for January 27.

06th Dec 2008

RBI cuts repo, reverse repo

• Short-term lending rate (repo) to 6.5 per cent
• Reverse Repo rate to 5 per cent with effect from December 8

01st Nov 2008

RBI cuts repo rate by 0.50% to 7.5%

• The Reserve Bank of India (RBI) today cut its short term lending rate by 0.50 per cent.
• CRR cut by 100 bps to 5.5%
• 100 bps cut on SLR to 24% from Nov 8
• RBI to buyback MSS Bonds to inject liquidity

28th October 2008

Fed cuts rates and gives grim view

• The rate cut put the central bank's federal funds rate at 1%. That matched the lowest level for this overnight bank lending rate ever -- the last time it was at 1% was from June 2003 to June 2004.

20th October 2008

Reserve Bank cuts repo rate to ease credit squeeze

• Ahead of its monetary policy review scheduled later this week, the Reserve Bank of India on Monday slashed its key short-term interest rate – Repo rate – by one percentage point to 8 per cent, as part of its ongoing efforts to ease the pressure in the credit market.
• The sharp 100 basis point cut in repo with immediate effect is seen as a clear signal to banks to reduce interest rates. The repo is the rate at which the RBI lends money to banks against the collateral of government securities.

8th October 2008

FED, ECB, BOE, and BOC Join Forces In Coordinated Rate Cut

30th July 2008

RBI hikes repo rate by 0.50% to 9%

• The Reserve Bank of India (RBI) today hiked its short term lending rate by 0.50 per cent taking it to 9%.
• Repo rate hike ‘warranted’

25th June 2008

RBI hikes repo rate by 0.50%

• The RBI on Tuesday hiked both the repo rate and the cash reserve ratio (CRR) by 50 basis points each.
• The repo rate has been hiked with immediate effect, while the CRR would be hiked in two tranches — on July 5 and July 19.

11th June 2008

RBI hikes repo rate by 0.25%

• The Reserve Bank of India (RBI) today hiked its short term lending rate by 0.25 per cent with immediate effect, a move that is likely to force banks to increase interest rates and help check inflation.
• The repo rate was increased by 25 basis points to 8.00 per cent from 7.75 per cent with immediate effect.
• The reverse repo rate, at which RBI borrows money from banks in exchange of the government papers, however, has been kept in tact at six per cent.

29th April 2008

RBI increases CRR by 0.25% to 8.25%

• RBI hikes CRR by 0.25 per cent from May 24
• Repo, Reverse Repo, Bank Rates unchanged
• RBI projects economy to grow by 8-8.5 per cent in 2008-09
• Inflation to be brought down to around 5.5 per cent in 2008-09 with a preference for bringing it close to 5.0 per cent as soon as possible. Going forward, the resolve is to condition policy and perceptions for inflation in the range of 4.0-4.5 per cent so that an inflation rate of around 3.0 per cent becomes a medium-term objective

17th April 2008

RBI increases CRR by 0.5% to 8%

• Reserve Bank of India announced the hike in cash reserve ratio (CRR) by 50 basis points in two phases to 8% in the light of the current macroeconomic, monetary and anticipated liquidity conditions, and with a view to contain the rising inflation
• In the first stage, CRR will be hiked by 25 bps from the fortnight beginning from April 26, which will be later hiked to 50 bps from the fortnight beginning from May 10
• As a result of the above increase in CRR on liabilities of the banking system, an amount of about Rs 185 billion of resources of banks would be absorbed.

19th March 2008

Fed cuts key interest rate

• In a forceful move to contain the growing credit crisis, the central bank slashes its benchmark interest rate by three-quarters of a percentage point to 2.25%
  

29th January 2008

Reserve Bank of India
Third Quarter Review of Annual Statement on Monetary Policy for the Year 2007-08

• Bank rate, reverse repo rate, repo rate and cash reserve ratio (CRR) kept unchanged.
• Overall real GDP growth projection for 2007-08 at around 8.5 per cent is retained.
• The policy endeavour would be to contain inflation close to 5.0 per cent in 2007-08 while conditioning expectations in the range of 4.0-4.5 per cent.
• Liquidity management will assume priority in the conduct of monetary policy through appropriate and timely action.

22nd January 2008

US Federal Reserve cuts rate

• In a surprise move the US Federal Open Market Committee on Tuesday slashed a key interest rate by 75 basis points (0.75 per cent) to 3-1/2 per cent ahead of its meeting next week.

12th December 2007

US Federal Reserve cut its benchmark Fed funds rate by 25 bps to 4.25%

• Fed also cut the discount rate (i.e. the cost of direct loans from the Central Bank) by quarter point to 4.75%. (The gap with the federal funds rate continues to remain at a half a point).

• The move is aimed at bailing out the US economy from the housing slump and financial sector turmoil. In the statement, the FOMC said that the cut "should help promote moderate growth over time. Recent developments, including the deteriorration in financial market conditions, have increased the uncertainty surrroundig the outlook for economic growth and inflation. Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in buisness and consumer spending."

• With the US economy expected to slow down in next couple of quarters, we expect US Fed to resort to few more cuts till mid 2008.

• Despite strong performance in Q3 2007, European economies are expected to slacken in coming quarters and Japan is already showing signs of moderating: a looser monetary policy environment in developed countries is likely over 2008.

7th December 2007

Bank of England Cuts Rates; ECB Hold

• The Bank of England cut official interest rates for the first time in two years on Thursday, reflecting growing concerns that economic growth will stall because of the global credit squeeze.

• Bank of England trimmed rates by quarter of a percentage point to 5.5 percent

• The European Central Bank, meanwhile, put itself in "wait-and-see mode," as it left its benchmark rate unchanged amid strong concern about surging inflation but relatively solid economic growth in the euro zone.

• ECB left its benchmark rate unchanged at 4 percent

7th December 2007

Bank of England Cuts Rates; ECB Hold

• The Bank of England cut official interest rates for the first time in two years on Thursday, reflecting growing concerns that economic growth will stall because of the global credit squeeze.

• Bank of England trimmed rates by quarter of a percentage point to 5.5 percent

• The European Central Bank, meanwhile, put itself in "wait-and-see mode," as it left its benchmark rate unchanged amid strong concern about surging inflation but relatively solid economic growth in the euro zone.

• ECB left its benchmark rate unchanged at 4 percent

• The European Central Bank raised interest rates a quarter percentage point to 3.5 percent on Thursday, as expected, taking them to the highest level in five years to keep inflationary pressures in check in a strongly growing economy
• The move continues the ECB's year-long policy of taking away monetary stimulus. The last time euro zone interest rates were this high was in November 2001
• The ECB said the interest rate on its deposit facility would also rise 25 basis points to 2.5 percent, and the rate on the marginal lending facility would rise the same amount to 4.5 percent. These rates are effective on Dec 13

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31st October 2006

Highlights of Mid-Term Review of the Annual Monetary
& Credit Policy for 2006-07

9th August 2006 

US Fed ends cycle of rate hikes

• US central bankers have held the country's key interest rate at 5.25%, breaking a two-year cycle of rate hikes introduced to slow a rampant economy

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25th July 2006 

First Quarter Review of Annual Statement on Monetary Policy for the Year 2006-07

• Reverse repo & repo rate hiked by 25 bps
• Bank rate unchanged at 6%
• CRR unchanged at 5%
• Inflation target unchanged at 5-5.5%
• Agri credit growth maintained at 3% in FY'07
• GDP growth forecast at maintained at 7.5-8%

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14th July 2006 

Bank of Japan hikes interest rate to 0.25%

• The Bank of Japan on Friday hiked interest rates from virtually zero (0.069 per cent) to 0.25 per cent
• This is the first increase in interest rates effected by Japan's central bank in almost six years

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29th June 2006 

US Fed ups interest rate to 5.25%

• The US Federal Reserve has raised interest rates by a quarter of a percentage point to 5.25% as it looks to slow inflation
• The Fed's Open Market Committee has raised its key interest rate for the 17th time in a row to its highest level in more than five years
• Federal Reserve head Ben Bernanke said the risk of inflation could well require "some further policy firming". But he also indicated that the string of rate rises could be nearing an end

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8th June 2006 

RBI initiative before July policy

• Reverse Repo Rate increased from 5.50% to 5.75%
• Repo Rate increased from 6.50% to 6.75%

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18th April 2006 

Highlights of the Credit Policy 2006-07

• Monetary Measures
• Bank Rate kept unchanged at 6.0 per cent
• Reverse Repo Rate and Repo Rate kept unchanged at 5.5 per cent and 6.5 per cent, respectively
• Cash reserve ratio (CRR) kept unchanged at 5.0 per cent

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24th Januray 2006

Highlights of Q3 Credit and Monetary Policy

• 2005-06 GDP growth revised upwards to 7.5-8 per cent
• Inflation unchanged at 5-5.5 per cent
• Reverse repo rate up by 0.25 per cent to 5.50 per cent
• Repo rate hiked by 0.25 per cent to 6.50 per cent
• Bank rate kept unchanged at 6 per cent
• Cash Reserve Ratio unchanged at 5 per cent
• PLR unchanged across banks
• Interest rates firmed up in almost all segments
• Call money rates rose to 6.58 per cent in Jan, 2006
• 91 & 365 day treasury bill rates up to 6.19, 6.30 pc
• Deposit rates of over one yr maturity rose to 5.5-7 pc
• Signs of slowdown in private corporate sector

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25th October 2005

Mid term Credit Policy


• RBI hikes reverse repo rate, repo rate by 25 bps
• Reverse repo rate hiked to 5.25%, repo to 6.25%
• RBI leaves bank rate unchanged at 6%
• RBI alters policy stance to up emphasis on price stability
• RBI ups GDP estimate for FY07 to 7-7.5% from the earlier 7%
• RBI retains inflation target at 5-5.5%
• M3 expansion seen higher than 14.5%
• Deposit growth to be higher than earlier estimate of Rs 2.6 lakh crore
• Non-food bank credit to be higher than earlier estimate of 19%

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• The Federal Reserve Tuesday (8th August 2005) raised its bellwether federal funds rate target by a quarter-percentage-point to 3.50 percent, its 10th straight rise.

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• Bank of England cuts rate from 4.75% to 4.50%. First rate cut in last 2 years.

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• Bank rate, Reverse Repo Rate and CRR unchanged
• Liquidity overhang remains substantial
• No evidence of demand pressure inspite of credit rise
• Global oil prices to dominate price situation
• Domestic economic factors to remain positive
• Stance of FY06 Monetary Policy to continue
• Pass through of oil prices on inflation not yet complete

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28th April 2005

• The RBI raised reverse repo rate by 25 bps to 5.00%
• Bank rate unchanged at 6%
• The RBI left the CRR unchanged at 5.0%
• The RBI will continue to pursue its medium-term objective of reducing the CRR to the statutory minimum level of 3.0%
• The economy is forecast to grow by about 7.0% during the fiscal year to end-March 2006, assuming normal monsoons, agriculture growth at 3% and expectation that industry and services sectors would maintain their current growth momentum while absorbing the impact of oil prices
• The RBI projected inflation, on a point-to-point basis in a range of 5.0-5.5% subject to the growing uncertainties on the oil front both in regard to global prices and their domestic absorption
• The minimum maturity period of CDs has been reduced to 7 days from 15 days with immediate effect.
• Banks to be allowed to approve proposals for commodity hedging in international exchanges from their corporate customers
• Closing time for inter-bank foreign exchange market in India to be extended by 1 hour up to 5:00 p.m. (1130 GMT)
• To raise the ceiling on overseas investment by Indian entities in joint ventures and/or wholly owned subsidiaries to 200% from 100% of their net worth under the automatic route
• To issue guidelines on merger and amalgamation between private sector banks and with non banking finance companies

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26th October 2004

• Repo rate hiked by 25 bps to 4.75%
• Holds Bank rate at 6%
• FY05 Growth forecasts cut to 6-6.5% from 6.5-7%
• Repo rate hiked to tame inflation
• Inflation forecast for FY 05 raised to 6.5% from 5%
• Impact of high crude oil prices not fully seen
• Market should look to price uncertainty
• High inflation, a lower bond appetite and pick up in credit could impact government borrowings
• Liquidity overhang remains substantial

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18th May 2004

• Bank, Repo rate steady. Stance aims at growth and price stability
• Forecast FY05 GDP at 6.5-7.00%.
• Point-to-Point inflation forecast at around 5%
• Expects Commercial Loans to grow by 16-16.5% in FY05
• 15% cap on unsecured exposures for banks withdrawn
• Exposures on all public financial institutions (PFIs) to attract a risk weight of 100 per cent
• Banks allowed to raise long-term bonds to finance infrastructure.

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03rd November 2003

• Bank Rate kept unchanged at 6 per cent
• Cash reserve ratio kept unchanged at 4.5 per cent in view of current liquidity situation

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29th April 2003

• Bank Rate reduced by 25 bps to 6%.
• CRR reduced by 25 bps to 4.50%.
• Inflationary situation on an average basis remained low except in the fourth quarter during 2002-03 despite drought. Inflation is expected to be in the range of 5.0 to 5.5 per cent during 2003-04.
• Lower increase in reserve money despite sharp increase in RBI's foreign currency assets.
• Government borrowing programme completed at lower interest cost with longer maturity. Interest rates on corporate paper are all time low.

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29th October 2002

• The Reserve Bank of India has cut the bank rate by 0.25 per cent to 6.25 per cent effective from the close of business hours on Tuesday. It is the lowest rate since 1973.
• RBI cut the cash reserve ratio (CRR) from 5 per cent to 4.75 per cent effective from the fortnight beginning November 16, 2002.
• The central bank has lowered its forecast for gross domestic product (GDP) growth by one per cent from 6-6.5 per cent to 5-5.5 per cent for the current fiscal ending March 2003, despite drought conditions.
• RBI has lowered the repo rate by 0.25 per cent to 5.50 per cent under its liquidity adjustment facility.

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29th April 2002

• The RBI announced a 50 bps cut in CRR to 5% from June 15
• The bank rate has been left unchanged for the moment, but may be cut later by 50 bps
• CDs to be issued in demat form

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22nd October 2001

• The Reserve Bank of India announced a cut in Bank Rate by 0.50 percentage point, from 7.0 per cent to 6.50 per cent to touch its lowest since May 1973.
• The RBI reduced CRR by 2.0 percentage points from 7.50 per cent to 5.50 per cent, releasing on additional liquidity of Rs 60 billion to banks.
• Most of the exemptions available on CRR removed.
• Interest rate paid on eligible CRR balances increased further to the level of Bank Rate i.e. 6.5 per cent (from 6.0 per cent since April 21, 2001 and 4.0 per cent earlier).

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19th April 2001

• RBI bars co-operative banks from lending against stocks
• CRR made more flexible, interest on CRR balance increased.
• Bank Rate left unchanged.
• Automatic route opens for FDI in NBFCs

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04th November 2000

• No changes in the monetary policy measures such as Bank Rate and Cash Reserve Ratio.
• RBI expects interest rate environment to remain stable, as per current indications.
• Much greater flexibility to corporates for raising resources through commercial paper, transferability of CDs (certificate of deposits) made easier.
• Measures to improve credit delivery mechanisms, technology upgradation, further deregulation and rationalisation of procedures.

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21st July 2000

• RBI increased the Bank Rate by 1 percentage point and CRR by 0.5 percentage point. Short-term repo rates were also substantially raised in several stages, soon after the introduction of Liquidity Adjustment Facility (LAF) on June 5, 2000 (these rates have recently been reduced). The change in course within four months of the April 1 reductions in Bank Rate/CRR has elicited a fair amount of comment and debate among experts, market participants and bankers.

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03rd May 2000