By IANS,
Mumbai : Following are the highlights of the mid-quarter review of the monetary policy conducted by the Reserve Bank of India (RBI) Thursday, which focuses on reining in inflationary expectations in the economy.
-Repurchase rate or short-term lending rate hiked by 25 basis points to 6 percent
-Reverse repurchase or short-term borrowing rate raised by 50 basis points to 5 percent
-Policy rates such as cash reserve ratio and statutory liquidity ratio unchanged
-Inflation remains the dominant concern in macroeconomic management
-Prices of food articles still contributing to the inflationary pressures
-Recent monetary actions having impact on both inflationary expectations and demand
-Risk remains over firming of commodity prices and consequent inflationary pressures
-India’s economic growth of 8.8 percent in first quarter indicates recovery is consolidating
-High volatility in factory output growth past two months raises doubts over effectiveness of production index
-Growth prospects in agriculture have been boosted by monsoon
-All leading indicators of service sector activity point to sustained growth
-Risks on external front will clearly abate despite exports remaining sluggish
-Fiscal deficit seems conforming and target of 5.5 percent unlikely to be breached