Friday, the Reserve Bank of India reduced the Cash Reserve Ratio or CRR by 150 basis points to 7.5%, with effect from the fortnight beginning October 11 instead of the 50 basis points reduction announced on October 6, which was the first reduction in CRR in at least five years.
The central bank stated reduction in the CRR would add 600 billion rupees or $12.2 billion into the financial system.
The central bank assured market participants that it is prepared to respond swiftly to meet any liquidity requirements that may arise in the context of the highly volatile external situation.
In a statement, the Indian central bank said, "The Reserve Bank is monitoring developments closely and continuously and would respond swiftly and even preemptively to any adverse external developments impinging on domestic financial stability, price stability and inflation expectations and the continuation of the growth momentum of the Indian economy."
Further, the RBI said it is committed to maintaining financial stability and active and flexible liquidity management using all policy instruments is an integral part of this objective.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.