scorecardresearchCash Reserve Ratio: Why does the RBI change it from time to time?

Cash Reserve Ratio: Why does the RBI change it from time to time?

Updated: 31 Jul 2022, 12:20 PM IST
TL;DR.
Cash reserve ratio is the proportion of funds that the commercial banks are mandated to keep with the RBI. We shed light on its nuances including the impact on inflation.
When the central bank is geared to control rising inflation, it can use the weapon of CRR in its armoury, and raise it appropriately.

When the central bank is geared to control rising inflation, it can use the weapon of CRR in its armoury, and raise it appropriately.