Win a FREE Trip!

Every week, a winner from the participants will win a free night's stay at Timber Trail Heights, Parwanoo. Submit your details now ... (* Conditions Apply )

×

Headlines

Powerful earthquake sparks panic in Indonesia --- SC upholds death penalty of man for raping, killing 4 yr-old --- PM holds bilateral talks with SAARC leaders except Sharif --- Diesel in UT Chandigarh cheaper than Punjab, Haryana --- Ban Ki-Moon asks men and boys to fight violence against women --- Some schemes of Water Resources slow: Uma Bharati
Status quo on rates, RBI focus back to inflation

For the second consecutive time, Reserve Bank Governor D Subbarao today left the key interest rate unchanged to fight inflation, and lowered the growth projection for the current fiscal to 6.5 per cent. However, as a liquidity inducing-measure, the Governor brought down the Statutory Liquidity Ratio (SLR) — the amount of deposits banks park in government bonds — by 1 per cent to 23 per cent, effective August 11. The key lending (repo) rate, at which banks borrow from RBI, has been retained at 8 per cent despite demands from the industry to cut interest rates to spur economic growth.

The Cash Reserve Ratio (CRR) — the amount of deposits banks keep with RBI in cash — has also been retained at 4.75 per cent.

“The primary focus of monetary policy remains inflation control in order to secure a sustainable growth path over the medium-term…lowering policy rates (now) will only aggravate inflationary impulses without necessarily stimulating growth,” Subbarao said in the first quarter monetary policy review.

Its move to lower the SLR may not be effective as banks’ average SLR holdings is already around 30 per cent. RBI cut the GDP growth forecast to 6.5 per cent from the earlier projection of 7.3 per cent in view of the ongoing global economic slowdown. Taking note of the deficient monsoon rains and subdued prices of petroleum products, it raised its fiscal-end inflation projection to 7 per cent, from 6.5 per cent earlier.

Stocks markets reacted negatively to the policy and the BSE 30-stock index, Sensex, fell over 71 points after it had trading 55 points up in the morning trade.

Related posts:

  1. RBI may not cut interest rates in view of high inflation
  2. RBI retains interest rates, indicates cut from now on
  3. Inflation cannot be controlled without sacrificing growth: RBI
  4. RBI likely to cut short-term lending rates by 0.25 pc: Experts
  5. RBI keeps rate unchanged; inflation to guide future action
  6. Slowdown to hit economy, inflation to moderate soon: FM
  7. RBI keeps key interest rates unchanged
  8. No reason for RBI to cut rates next week: HSBC
  9. Inflation inches up to 9.73 pc in October
  10. Overall inflation soars to 9.78% in August

Leave us a facebook comment:

Leave a Reply

You must be logged in to leave a comment. New user register here

Live Cricket Scores

Photo Gallery

Copyright © Kansan News Private Limited. All rights reserved