Sensex dips again on CRR hike, then recovers
Stock market benchmark Sensex dipped by more than 200 points soon after the Reserve Bank announced a hike in the ratio of cash that banks need to keep with it as mandatory deposits.
However, the clarity over the monetary policy led a recovery from the low levels and the Sensex was trading 128.46 points down at 19,849.21 at 1220 hours.
The index touched a low of 19,749.70 points, down 227.97 points from Monday's close.
RBI announced its mid-term monetary policy review today, increasing the Cash Reserve Ratio (CRR) for all banks by 0.5 per cent to 7.5 per cent from November 10 to suck out excess liquidity in the financial system.