Highlights of Indian central bank’s monetary policy update
July 26th, 2011 - 1:25 pm ICT by IANSMumbai, July 26 (IANS) Following are the highlights of monetary policy update conducted by Reserve Bank of India (RBI) Governor D. Subbarao that saw key rates hiked by a steep 50 basis points Tuesday:
* Repurchase rate, or short-term lending rate, hiked to 8 percent from 7.5 percent
* Reverse repurchase rate, or short-term borrowing rate, hiked to 7 percent from 6.5 percent
* Cash reserve ratio retained at 6 percent
* Statutory liquidity ration retained at 24 percent
* Bank rate untouched at 6 percent
* Inflation expected to remain elevated for few more months
* Moderation in inflation seen toward latter part of year
* Projection on annual inflation for year-end at 7 percent, against 9.4 percent now
* Projection on growth left unchanged at 8 percent for current fiscal
* Intention to maintain interest rate environment that moderates inflation
* Policy also tuned to manage risk of falling growth
* Measures to manage liquidity without undue stress on financial system
* Outlook for global crude oil prices uncertain in the near future
* High global commodity prices may also exert pressure on domestic inflation
* High global crude prices, domestic fuel subsidies will impact inflation
* This year’s monsoon may impact yields of grains, pulses, oilseeds and cotton
* Inadequate supplies may keep prices of eggs, meat, fish, milk and pulses high
* Government’s fiscal deficit target of 4.6 percent now a major challenge
* Real estate markets have remained firm
* Next mid-quarter review of monetary policy Sep 16
* Second quarter review of monetary policy Oct 25
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- Highlights of third quarter review of monetary policy - Jan 25, 2011
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- Highlights of mid-quarter review of RBI monetary policy - Jun 16, 2011
- India's central bank infuses more money in system - Jan 24, 2012
- India's central bank to review monetary policy Tuesday - Oct 29, 2010
- India's central bank halts rate hikes on lower inflation (Lead) - Dec 16, 2011
Tags: bank of india, basis points, cash reserve ratio, commodity prices, crude oil prices, crude prices, deficit target, domestic fuel, domestic inflation, fiscal deficit, global commodity, interest rate environment, liquidity, mid quarter, monetary policy, oilseeds, rbi governor, reserve bank of india, subbarao, undue stress