RBI credit policy | repo rate and reverse repo rate

rbi credit policy | repo rate and reverse repo rate

The reserve bank of india governor d. Subbarao will today announce the mid-year review of india’s credit policy.

Most bankers suppose a hike in policy rates because inflation stays a matter of concern. Finance minister pranab mukherjee, on monday, said that inflation is an issue of concern, indicating that the rbi could take some steps to check rising prices.

The central bank has as well said the inflation is above the ease level. “inflation needs to slow farther to ease concerns. It continues to be a priority while producing policy. Elevated inflation stays a challenge for monetary policy,” rbi said in an asseveration on monday. “food inflation continues to stay high in spite of a good monsoon, as price pressures have amplified for sure non-cereal items like milk, eggs, fish and meat whose output is less responsive to monsoon,” the central bank said. Food inflation was 13. 75 per cent for the week ended october 16. It has remained in double digit for the past three months.

The central bank feels decelerating exports, exchange rate appreciation, rising capital inflows are amongst components that could act as drag on.
However, the rbi-commissioned professional forecasters’ survey pegs overall fy11 economical growth at 8. 5 per cent.

So far the rbi has increased repo rates by 125 basis points (1. 25 per cent), reverse repo rates by 175 basis points (1. 75 per cent) and the money reserve proportion by 100 basis points (1 per cent).

Source: ndtv

Posted by musicking on Nov 2 2010. Filed under Business news. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry