Fourth Bi-monthly Monetary Policy Statement, 2015-16

IV bi-monthly monetary policy, 2015-16

Ques: September 29, 2015 RBI Governor Dr. Raghuram Rajan reduced the policy repo rate under the liquidity adjustment facility (LAF) by how many basis point?

a. 50

b. 75

c. 65

d. 25

Ans: a

Related facts:

  • September 29, 2015, the Reserve Bank of India (RBI) Governor Dr. Raghuram G. Rajan released Fourth Bi-monthly Monetary Policy Statement, 2015-16.
  • It has been decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points from 7.25 per cent to 6.75 per cent with immediate effect.
  • Keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liability (NDTL).
  • Continue to provide liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term repos of up to 0.75 per cent of NDTL of the banking system through auctions.
  • Continue with daily variable rate repos and reverse repos to smooth liquidity.
  • Consequently, the reverse repo rate under the LAF stands adjusted to 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 7.75 per cent.
  • Output growth projected for 2015-16 is marked down slightly to 7.4 per cent from 7.6 per cent earlier.
  • Inflation is expected to reach 5.8 per cent in January 2016.

Reference:

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=35087