RBI announces further measures to address the Exchange Market Volatility

RBI has set the overall limit for access to LAF for each bank at 0.5% of its own NDTL and mandated the banks to maintain a minimum daily CRR balance of 99% of its requirements.

RBI has undertaken further measures to contain the foreign exchange market volatility which are as follows:

• The overall limit for access to Liquidity Adjustment Facility by each individual bank is set at 0.5% of its own NDTL outstanding as on the last Friday of the second preceding fortnight. This measure will come into effect immediately, i.e., from July 24, 2013 and will remain in force until further notice.

• Currently, banks are allowed to maintain their Cash Reserve Ratio (CRR) prescribed by the RBI on an average daily basis during a reporting fortnight, with a minimum of 70% of the required CRR on a daily basis. Effective from July 27, 2013, banks will be required to maintain a minimum daily CRR balance of 99% of the requirement.