RBI Cuts SLR releases the 60000 Cr Rupees Into market

The Reserve Bank of India (RBI) kept the key indicative policy rates unchanged while it cut the gross domestic product (GDP) forecast for the current financial year from 7.3 per cent to 6.5 per cent and raised the inflation forecast from 6.5 per cent to 7 per cent.

However, the RBI cut the Statutory Liquidity Ratio (SLR) by one percentage point from 24 per cent to 23 per cent which is expected to provide liquidity of around Rs.60,000 crore.

“Even as our growth is slowing in line with the rest of the world, our inflation continues to be high…. the primary focus of monetary policy remains inflation control,” said D. Subbarao, Governor, RBI, while addressing a press conference after meeting bankers as part of its first quarter review of the Monetary Policy 2012-13.

In the present circumstances, said Dr. Subbarao, “lowering policy rates will only aggravate inflationary impulses without necessarily stimulating growth.”