Assocham lauds 50 bsp hike in CRR

New Delhi, Dec 9 (UNI) Industry chamber Assocham has welcomed Reserve Bank of India's decision for the intended cash reserve ratio (CRR) hike from 5 per cent to 5.50 per cent in two phases, saying that possible over heating of economy and rising inflationary trends will be curbed with it.

At this juncture a 50 basis points hike in the CRR will generate additional liquidity within the system which is a good sign, Assocham President Anil K Agarwal said in a statement issued here.

The monetary supply in the market currently is satisfactory and with the CRR increase it will not restrict industrial activities as markets have sufficient funds with it to support industries expansion and modernisation drive, he said.

The RBI yesterday announced a 50 basis point hike in the CRR maintained by banks to 5.5 per cent, to be undertaken in two stages.

The move will absorb Rs 13,500 crore from the system, the central bank had said.

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