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RBI Discontinue ICRR, to be Phased Out by October 7th

INDIA
  • RBI conclude their review into the ICRR, discontinuing the Incremental Cash Reserve Ratio across a number of phases.
  • These steps look to conclude the review into the incremental cash reserve ratio requirement - the ICRR is to be discontinued across three phases and be fully wound down by October 7th.
  • Reuters had reported earlier this week that the measure could be retained for a further two fortnights, but that seemingly no longer the case - with the bank likely instead relying on liquidity to naturally drain out via the twin tax outflows likely to dominate across the coming two weeks.
  • Headlines coincide with new lows for USD/INR headed into the local close, with the pair already trading lower following earlier headlines of aggressive selling of dollars via large state-run bank.

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