(a) whether recently Reserve Bank of India has increased the fixed
reserve repo rate ;
(b) if so, the details thereof; and
(c) the likely impact on the cost of credit ?
(a) whether recently Reserve Bank of India has increased the fixed
reserve repo rate ;
(b) if so, the details thereof; and
(c) the likely impact on the cost of credit ?
MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI S.S. PALANIMANICKAM)
(a)& (b) : In view of the current macroeconomic and overall monetary conditions,
Reserve Bank of India has increased the fixed reverse repo rate by 25 basis points
under the Liquidity Adjustment Facility (LAF) effective from October 26, 2005 to
5.25 per cent from 5.00 per cent.
(c) The Repo-rates do not have linear impact on the cost of credit, which is also
affected by various factors including Bank Rate, Repo Rates, Cash Reserve Ratio
(CRR) etc. The Reserve Bank of India takes these monetary measures keeping in
view the overall stance of monetary policy consistent with emphasis on price
stability, provision of appropriate liquidity to meet genuine credit needs and
support export and investment demand in the economy.