By IANS,
New Delhi : The monetary policy review by the central bank is on expected lines with no major change in key rates, and works in tandem with the fiscal policy of the government, Finance Minister Pranab Mukherjee said here Tuesday.
“Both fiscal and monetary policy are in close conformity with each other,” Mukherjee told reporters after the policy review was presented by Reserve Bank of India Governor D. Subbarao in Mumbai.
“The rates had been discussed with the Reserve Bank earlier. The Reserve Bank governor had met me few days ago. He met me on Friday. We had discussed and he indicated there would be no change in the rates,” the finance minister added.
Mukherjee’s remarks came after the central bank hiked the statutory liquidity ratio for central banks by 100 basis points to 25 percent, but kept all other policy and reserve rates untouched.
The central bank has particularly expressed concern over rising prices and raised its projection on inflation to 6.5 percent at the end of this fiscal from the earlier forecast of 5 percent.
Finance Secretary Ashok Chawla said the policy stance unveiled by the central bank was precisely what the government was hoping for, given the current state of play in the country’s monetary and fiscal space.
“These decisions were something important which must be praised by policymakers,” he said.