Home Economy Highlights of mid-quarter review of RBI monetary policy

Highlights of mid-quarter review of RBI monetary policy


Mumbai : Following are the highlights of the mid-quarter review of the monetary policy by the Reserve Bank of India Thursday:

— Repo rate hiked by 50 basis points to 7.5 percent

— Reverse repo automatically revised upwards to 6.5 percent

— Marginal standing facility rate increased to 8.5 percent

— No change in other statutory rates

— Deceleration in some interest-sensitive sectors such as automobiles, no evidence of any sharp or broad-based slowdown

— Baseline projection for GDP growth for 2011-12 maintained at around 8 percent

— Domestic inflation remains high and much above the comfort zone of the Reserve Bank

— Non-food manufactured products inflation is a matter of particular concern, suggests more generalised inflationary pressures

— Impact of the recent monetary policy actions is still unfolding

— RBI says rate hike will contain inflation by reining in demand side pressures and anchor inflation expectations

— RBI says actions expected to mitigate the risk to growth from potentially adverse global developments

— RBI will persist with its anti-inflationary stance of monetary policy

— Although global commodity prices have moderate they still pose a risk to both domestic growth and inflation