Highlights of mid-quarter review of India’s monetary policy
September 16th, 2010 - 2:17 pm ICT by IANSMumbai, Sep 16 (IANS) Following are the highlights of the mid-quarter review of the monetary policy conducted by the Reserve Bank of India (RBI) Thursday, which focuses on reining in inflationary expectations in the economy.
-Repurchase rate or short-term lending rate hiked by 25 basis points to 6 percent
-Reverse repurchase or short-term borrowing rate raised by 50 basis points to 5 percent
-Policy rates such as cash reserve ratio and statutory liquidity ratio unchanged
-Inflation remains the dominant concern in macroeconomic management
-Prices of food articles still contributing to the inflationary pressures
-Recent monetary actions having impact on both inflationary expectations and demand
-Risk remains over firming of commodity prices and consequent inflationary pressures
-India’s economic growth of 8.8 percent in first quarter indicates recovery is consolidating
-High volatility in factory output growth past two months raises doubts over effectiveness of production index
-Growth prospects in agriculture have been boosted by monsoon
-All leading indicators of service sector activity point to sustained growth
-Risks on external front will clearly abate despite exports remaining sluggish
-Fiscal deficit seems conforming and target of 5.5 percent unlikely to be breached
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Tags: bank of india, basis points, cash reserve ratio, commodity prices, dominant concern, fiscal deficit, food articles, growth prospects, inflationary expectations, inflationary pressures, leading indicators, macroeconomic management, monetary policy, monsoon, production index, reserve bank of india, service sector activity, statutory liquidity ratio, target, volatility