FIRST
BI-MONTHLY MONETARY POLICY STATEMENT, 2014-15
Monetary and Liquidity
Measures
On the basis of an
assessment of the current and evolving macroeconomic situation, it has been
decided to:
Ä Keep
the policy repo rate under the liquidity adjustment facility (LAF) unchanged at
8.0 per cent
Ä Keep
the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of
net demand and time liability (NDTL)
Ä Increase
the liquidity provided under 7-day and 14-day term repos from 0.5 per cent of
NDTL of the banking system to 0.75 per cent, and decrease the liquidity
provided under overnight repos under the LAF from 0.5 per cent of bank-wise
NDTL to 0.25 per cent with immediate effect.
Consequently, the
reverse repo rate under the LAF will remain unchanged at 7.0 per cent, and the
marginal standing facility (MSF) rate and the Bank Rate at 9.0 per cent.
CURRENT RATES
|
||
POLICY RATES
|
BANK RATE
|
9%
|
REPO RATE
|
8%
|
|
REVERSE REPO RATE
|
7%
|
|
MARGINAL STANDING FACILITY RATE
|
9%
|
|
RESERVE RATIO
|
CRR
|
4%
|
SLR
|
23%
|
|
LENDING RATE
|
BASE RATE
|
10% - 10.25%
|
The second bimonthly monetary policy statement is
scheduled to be announced on 3rd June.
Highlights of RBI monetary policy review:
F Short-term
lending (Repo) rate unchanged at 8 pc.
F Cash
reserve ratio (CRR) too unchanged at 4 pc.
F No
rate hike if inflation continues to trend lower.
F Economic
growth for 2014-15 expected at 5.5 pc.
F CAD
expected to come down to 2 pc of GDP in 2014-15.
F Retail
inflation expected to be under 6 pc in 2014.
F RBI
asks banks not to charge penalty for failure to maintain minimum balance in
inoperative account.
F Approval
of new bank licences after consulting EC.
F RBI
open to banking mergers, provided competition and stability are not
compromised.
F Industrial
activity continues to be a drag on economy.
F RBI
will strive to increase reach of financial services to everyone by using technology
and new products.
F Stress
on priority sector lending for greater financial access.
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