RBI Announced The Cut In Repo - March 5, 2009

On 4th March 2009, the Reserve Bank of India announced the cut in repo and reverse repo rates by 50 basis point each with immediate effect. Along with this, the repo, the rate at which the RBI lends short-term funds to banks, currently stands at 5 per cent from 5.5 per cent and the reverse repo, the rate at which the RBI borrows from banks, at 3.5 per cent from 4 per cent.

Now the banks are likely to cut both lending and deposit rates. This is the second rate cut by the RBI this calendar year. With ease in inflation rate to 3.36 per cent for the week ended February 14, 2009 and GDP growth falling to 5.3 per cent for the third quarter, rate cut by RBI was broadly expected. RBI has also cautioned banks to monitor their assets and take timely action to prevent defaults. The average PLR for most public sector banks is now 12.5 per cent.

Reverse Repo Auction Under The First LAF - Nov 19, 2008

Call rates ended lower at 6.50-6.75 per cent, as against the previous close of 6.90-7 per cent. The RBI received and accepted 1 bid for Rs 2,000 crore in the one-day repo auction under the first LAF in the one-day reverse repo auction under the first LAF, the RBI received and accepted 2 bids for Rs 2,500 crore. In the one-day repo auction under the second LAF, the RBI received and accepted 3 bids for Rs 2,700 crore.

In the one-day reverse repo auction under the first LAF, the RBI received and accepted 11 bids for Rs 13,600 crore. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were no bids. In the CBLO market, there were 473 trades amounting to Rs 29,483.35 crore in the rate range of 5.81-6.25 per cent.

Repo Auction Under The First Liquidity - Sep 26, 2008

Call rates closed a tad at 10-10.25 per cent, the same as on Sept 24.The RBI received and accepted 25 bids worth Rs 38,545 crore in the one-day repo auction under the first liquidity adjustment facility (LAF). There were no reverse repo bids. In the one-day repo auction under the second LAF, the RBI received and accepted 21 bids for Rs 10,660 crore. There were no reverse repo auctions. In the CBLO market, there were 380 trades amounting to Rs 21,844.70 crore in the rate range of 8.85-9.05 per cent.