MUMBAI: Indian equities markets cheered an unexpected cut in the cash reserve ratio ( CRR) by the Reserve Bank of India Tuesday as a benchmark index soared to rule 179 points higher soon after the decision was announced.

After nearly two years of tight check on money supply to tame inflation, the RBI took steps to infuse more liquidity in the system by reducing the cash reserve ratio by 50 basis points in a bid to help industry out of the current downturn.

The cash reserve ratio (CRR), the amount against deposits which commercial banks have to keep as liquid assets such as cash, has been lowered by 50 basis points to 5.5% from 6%.