Much in line with expectation, Reserve Bank of India, in its Fourth Bi-Monthly Monetary Policy Statement, 2014-15, held the fire as it kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.0%. Consequent to which the reverse repo rate under the LAF remain unchanged at 7.0%, and the marginal standing facility (MSF) rate and the Bank Rate at 9.0%.
India’s apex bank, however reduced the liquidity provided under the export credit refinance (ECR) facility from 32% of eligible export credit outstanding to 15% with effect from October 10, 2014 and decided to continue to provide liquidity under overnight repos at 0.25% of bank-wise NDTL at the LAF repo rate and liquidity under 7-day and 14-day term repos of up to 0.75% of NDTL of the banking system through auctions.