RBI monetary policy review: The highlights
Posted on: 12:23 PM IST Sep 17, 2012
Mumbai: The Reserve Bank of India (RBI) in its mid-quarter monetary policy review on Monday kept the repo rate unchanged but cut the Cash Reserve Ratio (CRR) by 25 basis points (bps), a move that will likely infuse Rs 17,000 crore into the economy.
The RBI will continue to target inflation in its credit policy.
Following are the highlights of the mid-quarter monetary policy review announced by the RBI on Monday:
- Cash Reserve Ratio cut by 0.25 per cent at 4.5 per cent
- Repo and reverse repo rates kept unchanged at 8 per cent and 7 per cent
- CRR cut to inject Rs 17,000 crore into banking system
- Government's recent reform initiatives to result in favourable growth-inflation dynamics
- Inflation remains a challenge; growth risks have increased
- Diesel price hike, subsidised LPG cap to put pressure on inflation
- Economic activity in July-September quarter to remain subdued
- Sustainable current account deficit to depend on fiscal consolidation.