Tuesday, May 3, 2011

Highlights of RBI’s monetary policy

The RBI raised its key interest rates by higher-than-expected 50 bps in a bid to control inflation

The following are the highlights of the Reserve Bank of India's (RBI) Monetary Policy statement for 2011-12:

* Short term lending rate (repo) hiked by 50 basis points (bps) to 7.25%

* Repo rate to be only effective policy rate to better signal monetary policy stance from now on

* Reverse repo to be fixed 100 bps lower than the repo rate

* Short-term borrowing rate (reverse repo) up by 50 bps to 6.25%

* Cash reserve ratio (CRR) and bank rate left unchanged at 6% each

* Interest rates on savings bank deposits hiked to 4% from 3.5%

* Economic growth projected lower at 8% for FY11-12

* WPI inflation projection lowered to 6%

* Objective is to contain inflation by curbing demand-side pressures

* Favours aligning of fuel prices with international crude prices to avert widening of fiscal deficit

* Banks to get a new overnight borrowing window under Marginal Standing Facility at 8.25%

* Likelihood of oil prices moderating significantly is low

* Malegam Committee recommendations on MFI sector broadly accepted

* Bank loan to MFIs on or after 1 April 2011, will be treated as priority sector loans


2 comments:

  1. Good Initiative from Aniram to support Investor public. Best wishes and keep it up - kapaleeswaran

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