Highlights of monetary policy update by India’s central bank

July 27th, 2010 - 1:52 pm ICT by IANS  

Mumbai, July 27 (IANS) Following are the highlights of the first quarter review of monetary policy for fiscal 2010-11 presented by Reserve Bank of India Governor D. Subbarao to chief executives of commercial banks here Tuesday:
– Repo rate hiked by 25 basis points to 5.75 percent

– Reverse repo rate hiked by 50 basis points to 4.5 percent

– Cash reserve ratio unchanged at 6 percent

– Statutory Liquid ratio unchanged at 25 percent

– Bank rate unchanged at 6 percent

– Inflation outlook raised to 6 percent by the end of March 2011 from 5.5 percent projected earlier

– Growth in the gross domestic product for this fiscal is projected at 8.5 percent against 8 percent earlier.

– Monetary policy intended to inflation and anchor inflationary expectations and respond to any further build-up of inflationary pressures

– Rate hike will help maintain financial conditions conducive to sustaining growth

– RBI will undertake mid-quarter reviews in about 45 days after each quarterly review

– Next mid-quarter reviews will be in September, December and March

– Second quarter review of monetary policy on November 2, 2010

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