RBI does minimum

The Reserve Bank of India, in its mid-quarter review of monetary policy on Monday, cut the cash reserve ratio by 25 basis points to 4.5 per cent, while leaving the policy rate unchanged at 8 per cent. The immediate impact of the cut in CRR is likely to be increased pressure on banks to use the extra liquidity to cut lending rates — pressure that will be reinforced, no doubt, by a finance ministry anxious to see quick results.

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