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CRR is a monetary policy signal: Subir Gokarn

CRR is a monetary policy signal: Subir Gokarn
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First Published: Wed, Dec 07 2011. 07 54 PM IST

A file photo of RBI deputy governor Subir Gokarn.
A file photo of RBI deputy governor Subir Gokarn.
Updated: Wed, Dec 07 2011. 07 54 PM IST
Kolkata: The cash reserve ratio is not just a liquidity tool but a monetary policy signal, a deputy governor of the Reserve Bank of India (RBI) said on Wednesday amid market speculation it may lower the ratio in order to ease tight liquidity in the banking system.
A file photo of RBI deputy governor Subir Gokarn.
“CRR is not just a liquidity tool but is also a monetary policy signal and we are as of now still in a situation where inflationary pressures are high,” Subir Gokarn said.
“Whether using an instrument that is part of monetary toolkit to address liquidity issue is certainly a debate which we have to engage in,” he said in an address to bankers.
Cash reserve ratio is the proportion of deposits that banks need to set aside with the central bank as cash. The ratio now stands at 6%.
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First Published: Wed, Dec 07 2011. 07 54 PM IST
More Topics: RBI | CRR | Subir Gokarn | Inflation | Rate hike |