Question: On 5 April 2016 RBI has issued First Bi-monthly Monetary Policy Statement, 2016-17. In this the policy repo rate has been reduced under the liquidity adjustment facility (LAF) by how much?
(a) 25 basis points
(b) 50 basis points
(c) 75 basis points
(d) 65 basis points
Ans (a)
Related facts:
- On 5 April 2016 has issued First Bi-monthly Monetary Policy Statement, 2016-17.
- On the basis of an assessment of the current and evolving macroeconomic situation, RBI has decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.75 per cent to 6.5 per cent.
- Earlier, the central bank on September 29, 2015 in its fourth bi-monthly Monetary Policy Statement 2015-16 the policy repo rate was reduced 50 basis points to 6.75 per cent from 7.25 per cent .
- RBI has decided to reduce the minimum daily maintenance of the cash reserve ratio (CRR) from 95 per cent of the requirement to 90 per cent with effect from the fortnight beginning April 16, 2016, while keeping the CRR unchanged at 4.0 per cent of net demand and time liabilities (NDTL).
- Effective from April 2, 2016 the statutory liquidity ratio (SLR) of scheduled commercial banks was reduced by 25 basis points from 21.5 per cent to 21.25 per cent of their NDTL.
- Consequently, the reverse repo rate under the LAF stands adjusted to 6.0 per cent, and the marginal standing facility (MSF) rate to 7.0 per cent. The Bank Rate which is aligned to the MSF rate also stands adjusted to 7.0 per cent.
- The GVA (Gross Value Added: GVA) growth projection for 2016-17 is estimated at 7.6 per cent.
Reference:
http://downloadpolicy3.rbi.org.in/PR2337E2B74CC806E54DD9B37F82576FAEF1CA.PDF