07/04/2025
https://youtu.be/3VC9H4a0GqA
The last time the Reserve Bank of India (RBI) announced both a Cash Reserve Ratio (CRR) cut and an interest rate (repo rate) cut in the same monetary policy meeting was on March 27, 2020.
During this meeting, amid the onset of the COVID-19 pandemic, the RBI took significant measures to support the economy. The Monetary Policy Committee (MPC), chaired by Governor Shaktikanta Das, reduced the repo rate by 75 basis points from 5.15% to 4.4%. Simultaneously, the CRR was cut by 100 basis points from 4% to 3%, effective from March 28, 2020, for a period of one year (later extended). This dual action was aimed at injecting liquidity into the banking system and easing monetary conditions to mitigate the economic impact of the lockdown.
This was a rare instance of both tools being deployed together, reflecting the extraordinary circumstances at the time. Since then, no single RBI policy meeting has featured simultaneous cuts to both the CRR and the repo rate as of the current date.
In the next RBI policy announcement we may get both CRR as well as interest rate cut as the tariffs have created a lot of pressure as well as uncertainty. We have seen in last two months the RBI is making active efforts to increase liquidity in banks.
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