Finance

Cutting cash reserve ratio can improve liquidity, says finance ministry official

Updated : September 25, 2018 04:04 PM IST

After the comments, the 10-year benchmark bond yield eased 1 basis point to 8.12 percent from before the news.

Cutting cash reserve ratio can improve liquidity, says finance ministry official

Cutting banks' cash reserve ratio (CRR), or the amount of funds they set aside with the central bank, are among options that the Reserve Bank of India (RBI) could look at to improve liquidity in the system, a finance ministry official said on Tuesday.

The central bank could also consider buying more bonds from the open market and open a special window for mutual funds to inject liquidity, the official told reporters, declining to be identified as the discussions are not public.

Presently, the CRR is at 4 percent of banks' total deposits.

After the comments, the 10-year benchmark bond yield eased 1 basis point to 8.12 percent from before the news.

Have you signed up for Primo, our daily newsletter?

It has all the stories and data on the market, business, economy and tech that you need to know.

To keep watching CNBC-TV18, India's No. 1 English Business News Channel, call your Cable or DTH Operator and subscribe now for just Rs. 4 per month. You can also subscribe to CNBC-TV18 Prime HD for Re 1/- per month.Find out more