RBI Governor Dr. D.Subbarao has just announced the RBI Credit Policy for the year 2010-2011.
The cash reserve ratio, repo rate and Reverse Repo rate has been decide to increase. It has been decided to increase the repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 5.0 per cent to 5.25 per cent with immediate effect, increase the reverse repo rate under the LAF by 25 basis points from 3.5 per cent to 3.75 per cent with immediate effect and increase the cash reserve ratio (CRR) of scheduled banks by 25 basis points from 5.75 per cent to 6.0 per cent of their net demand and time liabilities (NDTL) effective the fortnight beginning April 24, 2010.
The Bank Rate has been retained at 6.0 per cent.
Subbarao also stated that India’s growth-inflation dynamics are in contrast to the overall global scenario and The economy is recovering rapidly from the growth slowdown but inflationary pressures, which were triggered by supply side factors, are now developing into a wider inflationary process.
The Annual Policy statement is organised in two parts – Part A covers Monetary Policy and is divided into four Sections – Section I provides an overview of global and domestic macroeconomic developments; Section II sets out the outlook and projections for growth, inflation and monetary aggregates; Section III explains the stance of monetary policy; and Section IV specifies the monetary measures.Part B covers Developmental and Regulatory Policies and is organised into six sections: Financial Stability (Section I), Interest Rate Policy (Section II), Financial Markets (Section III), Credit Delivery and Financial Inclusion (Section IV), Regulatory and Supervisory Measures for Commercial Banks (Section V) and Institutional Developments (Section VI).
Read the full annual statement for the year 2010-2011 here.
