The Reserve Bank of India (RBI) today cut the repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 8.0 per cent to 7.75 per cent with immediate effect. The cash reserve ratio (CRR) has also been reduced by 25 basis points from 4.25 per cent to 4.0 per cent, effective the fortnight beginning February 9, 2013. As a result of the reduction in the CRR, around Rs 18,000 crore of primary liquidity will be injected into the banking system.

The reverse repo rate stands adjusted to 6.75per cent and the marginal standing facility (MSF) and bank rate stand adjusted to 8.75 per cent with immediate effect.
Announcing the third quarter monetary policy review in Mumbai today, RBI Governor Dr D Subbarao said that the policy action and guidance in the statement are expected to support growth. They are also expected to continue to anchor medium-term inflation expectations on the basis of a credible commitment to low and stable inflation;and improve liquidity conditions to support credit flow.