Anurag Bhullar
By now even RBI (Reserve Bank of India) must be tired of rate cuts in CRR (Cash Reserve Ratio). There has been a string of announcements in recent times. The number of times for which the slicing act was done stands at 14, in period of last 20 months. Looking at the break-up in a year wise manner, 2007 saw 4 such dips; 2008 witnessed 9 lows and the most recent is the one declared at the very advent of 2009.
Trimming CRR is one of the strategies to tackle liquidity in the financial system. In attempts to bring the national financial standing in shape, the apex bank continuously came up with similar announcements.
The period of April 2007 to August 2008 has seen the most number of pops and drops in this ratio. Among these, the most abrupt decline was the fall in the value from 9% to 6.5% in Oct’08.
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