The Reserve Bank of India (RBI) Governor today presented the first quarter review of annual statement on Monetary Policy for the Year 2008-09.
Some of the key highlights are as follows:
- The RBI hiked repo rate by 50 basis points from 8.5 per cent to 9.00 per cent.
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- Cash Reserve Ratio to be raised by 25 basis points to 9.0 per cent with effect from the fortnight beginning August 30, 2008.
- Bank Rate kept unchanged.
- Reverse Repo Rate under LAF kept unchanged.
- GDP growth projection for 2008-09 revised from the range of 8.0-8.5 per cent to around 8.0 per cent, barring domestic or external shocks.
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- While the policy actions would aim to bring down the current intolerable level of inflation to a tolerable level of below 5.0 per cent as soon as possible and around 3.0 per cent over the medium-term, at this juncture a realistic policy endeavour would be to bring down inflation from the current level of about 11.0-12.0 per cent to a level close to 7.0 per cent by March 31, 2009.
- While there are early signs of some moderation in money supply and deposit growth, they continue to expand above the indicative projections warranting continuous vigilance and appropriate and timely policy responses.