No more agressive rate cuts, CRR cut to infuse liquidity rapidly: Gokarn

There is no room for aggressive rate cuts in India in the current situation, Subir Gokarn, a deputy governor of the Reserve Bank of India, told CNBC-TV18 on Friday.He said that the bank had taken congnizance of the tight liquidity situation and announced a cut in Cash Reserve Ratio (CRR) for rapid liquidity infusion

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Gokarn said a cut in the interest rates was the next logical step but would depend on other macro-economic factors. He added that credit growth continues to be in a deceleration mode and is the consequence of the central bank’s previous policy stance.

The RBI cut banks’ cash reserve ratio, or the amount banks have to maintain with the central bank, by 50 basis points to 5.5 percent in its policy review on January 24 but kept its key policy rate unchanged.

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With inputs from Reuters