The Reserve Bank of India is unlikely to ease the requirement for banks to keep cash with the central bank through a cut in CRR rate in its mid-term monetary review on October 24 even though the banking system is facing liquidity problem, Finance Ministry sources said on Wednesday.
They also said RBI is unlikely to change short-term lending and borrowing rates-- repo and reverse repo-- in the upcoming policy review.
There would be a pause on the rate tightening cycle, they said.
"By the end of October or early November, the first tranche of Rs 25,000 crore to banks for their outgo on farm debt waiver would be released which is more than about one per cent CRR cut," the sources said.
There is thus no scope for reducing cash reserve ratio (CRR), they said. RBI last raised CRR by 25 basis points to 9 per cent in July this year.
However, sources also admitted that domestic banks are facing liquidity problems due to global financial crisis.
On the rupee depreciation, sources said RBI is controlling the rupee's volatility against dollar but has not set any target value for the domestic currency.
