When the Reserve Bank of India reduces the Statutory Liquidity by 50 ...

UPSC Prelims 2015 Economy

When the Reserve Bank of India reduces the Statutory Liquidity by 50 basis points, which of the following is likely to happen?

Explanation

Reducing the SLR by the RBI is likely to lead to increased liquidity in the banking system in the short term, and potentially lower lending rates by commercial banks. This can contribute to increased economic activity but wouldn't drastically alter GDP growth or directly impact FIIs.

← Previous Which one of the following issues the “Global Economic Prospects” report periodically? Next → There has been a persistent deficit budget year after year. Which of the following acti...