RBI hikes CRR by 75 bps

RBI has hiked CRR by 75 bps, this move will implemented in two stages. In first step it will hike by 50 bpt and in next move it will hiked by 25 bps more. The step taken by RBI was unexpected by bankers because banks had expected it to hike by only 50 bps. This step has been taken to curb the inflationary pressure, because impact of inflation from food item is also touching to non food items and also fuel products too.
CRR hikes will also lead to rise in interest rate because banks have to keep 5.75% of their deposits with RBI in cash, so banks can't lend 5.75% of their deposit, so definitely less money to lend ,results in high interest rate. But still RBI has assured that this move will not give immediate rise to high interest rate. The other Rate repo, reverse repo all remain unchanged. To give boost to economy RBI has taken call on that , now future will answer how fruitful this step of RBI is?

Why RBI hikes and cuts CRR

What CRR is
Cash Reserve Ratio: "It is certain fixed percentage of time and demand liablities of banks that RBI keeps with itself."
Currently it is 5%, when we were grappling with the recession it was hiked by 50 basis point and reached at 5.5% the reason behind was that if CRR is hiked that commercial banks will be having short of supply that can lend to general public bacause banks have to keep reserve more with RBI, generally during slowdown, flow of money tightens , so during recession RBI hikes the CRR but when the recession gets over the RBI again starts to take the reverse steps and cuts the CRR, and we have seen that RBI cut the CRR by 50 basis points and again it is 5%. the reason being that as recession impacts get slow , liquidity starts to flow, and again banks starts to lend the money.
(the monetory measures are taken by RBI, while fiscal measures are taken by government.)