RBI raises CRR by 50 bps to 4.5% from May 21

The Reserve Bank on Wednesday introduced a hike in money reserve ratio (CRR) by 50 foundation factors to 4.5 per cent, efficient May 21, which is able to take out Rs 87,000 crore liquidity from the system.

The determination was introduced by RBI Governor Shaktikanta Das after an off-cycle assembly of the rate-setting panel — Monetary Policy Committee (MPC).

CRR is a proportion of a financial institution’s whole deposits that it wants to take care of as liquid money. The MPC additionally determined to boost the repo price or the short-term lending price by 40 foundation factors to 4.4 per cent.