Fourth Bi-monthly Monetary Policy Statement for 2014-15 Update

September 30, 2014

§        The policy repo rate under the liquidity adjustment facility (LAF) kept unchanged at 8%;

§        Cash reserve ratio (CRR) of scheduled banks kept unchanged at 4% of net demand and time liabilities (NDTL);

§        Reduced the liquidity provided under the export credit refinance (ECR) facility from 32% of eligible export credit outstanding to 15% with effect from October 10, 2014;

§        Continue to provide liquidity under overnight repos at 0.25% of bank-wise NDTL at the LAF repo rate and liquidity under 7-day and 14-day term repos of up to 0.75% of NDTL of the banking system through auctions; and

§        Continue with daily one-day term repos and reverse repos to smooth liquidity.

Consequently, the reverse repo rate under the LAF will remain unchanged at 7%, and the marginal standing facility (MSF) rate and the Bank Rate at 9%