Key points made by RBI governor in monetary policy reviewJanuary 27th, 2009 - 2:08 pm ICT by IANS
Mumbai, Jan 27 (IANS) Following are some key points made by Reserve Bank of India (RBI) Governor D. Subbarao in his quarterly monetary policy review before the chief executives of commercial banks here Tuesday:- This quarterly review is set in the context of a deteriorating global economic outlook and heightened uncertainty about the global financial sector.
- The initial hope that the crisis could be contained in the financial sector has been belied.
- There is now distinct evidence of further slowdown as a consequence of the global downturn.
- The knock-on effects of the global financial crisis, economic slowdown, and falling commodity prices are affecting the Indian economy in several ways.
- As an integral part of a globalising world, India cannot be expected to remain immune to a global crisis of this nature and magnitude.
- In responding to the crisis, India has to share the uncertainty on the way forward just like the rest of the world.
- To arrest the moderation in economic growth, it is critical that banks expand the flow of credit to productive sectors of the economy, and do so at viable rates.
- The actions of the Reserve Bank since mid-September 2008 have resulted in augmentation of actual or potential liquidity of over Rs.388,000 crore (Rs.3,880 billion).
- The response to the Reserve Bank’s policy actions over the last several months is still unfolding.
- The projection of overall real gross domestic product growth for 2008-09 is revised downwards to 7 percent with a downward bias.
- Keeping in view the global trend in commodity prices and the domestic demand-supply balance, wholesale price inflation is now projected to decelerate to below 3 percent by end-March 2009.