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Credit Policy: RBI keeps rates unchanged
April 29, 2008
The Reserve Bank of India announced the Monetary and Credit Policy on Tuesday. Following are the highlights:
RBI hikes CRR by 0.25 per cent from May 24;
Repo, Reverse Repo, Bank Rates unchanged.
RBI projects economy to grow by 8-8.5 per cent in 2008-09;
Inflation to be brought down to around 5.5 per cent in 2008-09 with a preference for bringing it close to 5.0 per cent as soon as possible. Going forward, the resolve is to condition policy and perceptions for inflation in the range of 4.0-4.5 per cent so that an inflation rate of around 3.0 per cent becomes a medium-term objective.
High priority to price stability, well-anchored inflation expectations and orderly conditions in financial markets while sustaining the growth momentum.
Swift response on a continuous basis to evolving adverse international and domestic developments through both conventional and unconventional measures.
Emphasis on credit quality and credit delivery while pursuing financial inclusion.
Scheduled banks required to maintain CRR of 8.25 per cent with effect from the fortnight beginning May 24, 2008.
M3 expansion to be moderated in the range of 16.5-17.0 per cent during 2008-09.
Deposits projected to increase by around 17.0 per cent or Rs 5,50,000 crore (Rs 5,500 billion) during 2008-09.
Adjusted non-food credit projected to increase by around 20.0 per cent during 2008-09.
Image: A policeman stands guard outside the Reserve Bank of India headquarters in Mumbai | Photograph: Pal Pillai/AFP/Getty Images
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