Highlights of mid-quarter review of RBI monetary policy

June 16th, 2011 - 2:58 pm ICT by IANS  

Mumbai, June 16 (IANS) Following are the highlights of the mid-quarter review of the monetary policy by the Reserve Bank of India Thursday:

– Repo rate hiked by 50 basis points to 7.5 percent

– Reverse repo automatically revised upwards to 6.5 percent

– Marginal standing facility rate increased to 8.5 percent

– No change in other statutory rates

– Deceleration in some interest-sensitive sectors such as automobiles, no evidence of any sharp or broad-based slowdown

– Baseline projection for GDP growth for 2011-12 maintained at around 8 percent

– Domestic inflation remains high and much above the comfort zone of the Reserve Bank

– Non-food manufactured products inflation is a matter of particular concern, suggests more generalised inflationary pressures

– Impact of the recent monetary policy actions is still unfolding

– RBI says rate hike will contain inflation by reining in demand side pressures and anchor inflation expectations

– RBI says actions expected to mitigate the risk to growth from potentially adverse global developments

– RBI will persist with its anti-inflationary stance of monetary policy

– Although global commodity prices have moderate they still pose a risk to both domestic growth and inflation

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