CRR cut by 0.25 per cent, repo rate unchanged

New Delhi: The Reserve Bank of India (RBI) on Monday cut the cash reserve ratio by 25 basis points to 4.5 per cent, increasing liquidity flow into the economy. However, it left the key bank rate and the repo rate unchanged, saying inflation risks as well as growth risks persist and the primary focus of monetary policy is fighting inflation, a move that many called conservative.

"In the current circumstances, lowering policy rates will only aggravate inflationary impulses without necessarily stimulating growth," RBI governor D. Subbarao wrote in the monetary policy review.