Highlights of monetary policy unveiled by India’s central bank

May 3rd, 2011 - 2:09 pm ICT by IANS  

Sensex Mumbai, May 3 (IANS) Following are the highlights of the monetary policy for this fiscal unveiled by the Reserve Bank of India (RBI) Governor D. Subbarao Tuesday:

– Repo rate hiked by 50 basis points to 7.25 percent

– Reverse repo hiked by 50 basis points to 6.25 percent

– Saving bank deposit rates increased by 50 basis points to 4 percent

– Sensex, Nifty tank; banking, auto stocks battered

– Other policy rates such as statutory liquidity ratio and cash reserve ratio unchanged

– Henceforth the repo rate will be the only one independently varying policy rate

– Reverse repo rate to be no longer independent, will be pegged at a fixed 100 basis points below the repo rate

– Baseline projection for gross domestic product growth for 2011-12 at around 8 percent

– Annual whole sale price inflation pegged at 6 percent by end-March 2012

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

– RBI says actions expected to sustain growth in medium-term by containing inflation

– RBI will continue to persevere with its anti-inflationary stance

– Global commodity prices are a significant risk factor for both domestic growth and inflation

– Fiscal target set in the budget could be challenged by higher subsidy burden stemming from higher international crude oil prices

– Slackening in global recovery could impact economy through trade, finance and confidence channels

– Stance of monetary policy will be to ensure balance in liquidity flow

Related Stories

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |

Subscribe