RBI HAS INCREASED REPO RATE BY 50 BASIS POINTS

Reserve bank of India has increased repo rate by 50 basis points to 8 percent from 7.5 percent with immediate effect. RBI  has also made changed in LAF and MSF with the changes in repo rate. Full circular of Reserve Bank of India is as under.

RBI/2011-2012/126
FMD.MOAG. No.61/01.01.01/2011-12

July 26, 2011

All Scheduled Commercial Banks (excluding RRBs) and Primary Dealers

Dear Sir,

Liquidity Adjustment Facility – Repo and Reverse Repo 
and Marginal Standing Facility Rates

As announced in the First Quarter Review of Monetary Policy 2011-12, it has been decided to increase the repo rate under the Liquidity Adjustment Facility (LAF) by 50 basis points from 7.50 per cent to 8.00 per cent with immediate effect.

2. Consequent to the above increase in the repo rate, the reverse repo rate under the LAF will stand automatically adjusted to 7.00 per cent and the Marginal Standing Facility (MSF) rate to 9.00 per cent with immediate effect.

3. All other terms and conditions of the current LAF and MSF Schemes will remain unchanged.

4. Please acknowledge receipt.

Yours sincerely

(G. Mahalingam)
Chief General Manager

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