RBI Q3 monetary policy review: Key Highlights

RBI Q3 monetary policy review: Key Highlights Mumbai: After a gap of 9 months, the Reserve Bank of India (RBI) on Tuesday slashed short term lending (repo) rate by 0.25 percent to 7.75 percent, a move that will reduce the cost of home, auto and corporate loans.

Following are the highlights of the RBI's third quarter monetary policy review:


  • Short-term lending rate or repo rate reduced by 0.25 percent to 7.75 percent, first time in nine months.


  • Reverse repo rate stands adjusted to 6.75 percent.


  • Reduces cash reserve ratio (CRR) by 0.25 percent to 4 percent.


  • CRR cut to infuse Rs 18,000 crore in system from Feb 9.


  • RBI trims growth for fiscal 2012-13 to 5.5 percent from 5.8 percent.


  • Policy action aimed at aiding growth by encouraging investment and improving liquidity to support credit flow.


  • Review intends to contain inflation and anchor inflation expectations.


  • RBI says inflation has come off its peak.


  • Revises downward March-end inflation projection to 6.8 percent from 7.5 percent.


  • Q3 CAD likely to widen beyond 5.4 percent of GDP.


  • Bank rate stands adjusted to 8.75 percent with immediate effect.


  • Next mid-quarter review of monetary policy on March 19.



PTI