Announcing the Monetary and Liquidity Measures on the basis of an assessment of the current and evolving macroeconomic situation, the RBI Governor said it has been decided to:
• keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.75 per cent;
• keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL);
• reduce the statutory liquidity ratio (SLR) of scheduled commercial banks by 50 basis points from 22.0 per cent to 21.5 per cent of their NDTL with effect from the fortnight beginning February 7, 2015;
• replace the export credit refinance (ECR) facility with the provision of system level liquidity with effect from February 7, 2015;
• continue to provide liquidity under overnight repos of 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 7-day and 14-day term repos of
up to 0.75 per cent of NDTL of the banking system through auctions; and
• continue with daily variable rate term repo and reverse repo auctions to smooth liquidity. Consequently, the reverse repo rate under the LAF will remain unchanged at 6.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 8.75 per cent.