Mumbai: The Reserve Bank of India (RBI) has decided to effect the 50-basis points cut in the cash reserve ration (CRR) from 1 June 2002, a fortnight ahead of its earlier scheduled date.

In the monetary and credit policy for 2002-03, the RBI had announced that the CRR be reduced by 50 basis points from the fortnight beginning 15 June 2002. But the RBI has advanced the date after a review of the present liquidity situation. The reduction in the CRR will release funds to the tune of Rs 6,000 crore to the system.

A section of bond-dealers believe that the RBI has decided to advance the reduction in the CRR because there were signs of interest rates hardening. Indications of a revival in the US economy may result in the increase of Fed rates, pushing up interest rates globally, said an analyst.