RE:crr, rrr, rr
by Sushanta on Apr 29, 2008 09:09 AM Permalink
CRR means 'Cash Reserve Ratio'. A part of the banks' money to be deposited with RBI. Hence, the money available with banking system will be relatively low in case of a CRR hike. Lesser money in banking system means lesser credit to industries and individuals. This means lesser growth.
A CRR hike can lower inflation. Too much money in the hand of consumers/industry when demand exists, will help price rise.
However, if the inflation is due to supply shocks (lesser supply due to supply constraints), a tighhter monetary policy cant help.
RR-> Repo rate: Rate at which banks borrow from RBI or other Financial institutions by hypothecating securities. RRR->Reverse repo rate: The repurchase rate of the said securities.
CRR is a quantitative measure wherein Repo/Reverse Repo are rate measures.
RE:RE:crr, rrr, rr
by Sahadevan KK on Apr 29, 2008 09:55 AM Permalink
My store has been stolen by a inflation thief. MMS and Chidu will bring common people to beg and suicide. what a development!!
RE:crr, rrr, rr
by basavaraj tatawati on Apr 29, 2008 09:21 AM Permalink
Good information.But if CRR is hiked how it would help in reducing the inflation. By reducing the money flow in the market only interest would go up which results in loss of money to common person. He may pospone purchases which is loss to business & in turn to mfg units. Loss to industry results in wage reduction and more borrowing. In nutshell only banks earn more at the cost of business and common man Is it right?
RE:crr, rrr, rr
by Vasan on Apr 29, 2008 10:00 AM Permalink
Ya very right, So if NO one purchase, Industry and MFG units will try to reduce price, so that it can sell its product at lesser price
