This cap was initially set at 20 per cent of daily average rupee deposits and tightened further to 18 per cent as from July 2011. There is no limit on banks’ holdings of Treasury Bills in their trading book.
Second, the BSP was among the central banks in the world that immediately responded to the crisis by deploying a set of comprehensive measures. The Monetary Board cut the policy rate by 200 basis points and the reserve requirement by another 200 basis points. As a result of this bold, timely, and decisive action, the country’s interest rates hit a historic low.