First Quarter Review of the Monetary Policy for 2011-12
-Announced on the 26th July 2011
IV. Monetary Measures
58. On the basis of current assessment and in line with the policy stance outlined in Section III, the Reserve Bank announces the following policy measures:
59. It has been decided to:
increase the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points from 7.5 per cent to 8.0 per cent with immediate effect.
Reverse Repo Rate
60. The reverse repo rate under the LAF, determined with a spread of 100 basis points below the repo rate, automatically adjusts to 7.0 per cent with immediate effect.
Marginal Standing Facility (MSF) Rate
61. The Marginal Standing Facility (MSF) rate, determined with a spread of 100 basis points above the repo rate, stands recalibrated at 9.0 per cent with immediate effect.
62. The Bank Rate has been retained at 6.0 per cent.
Cash Reserve Ratio
63. The cash reserve ratio (CRR) of scheduled banks has been retained at 6.0 per cent of their net demand and time liabilities (NDTL).
64. It is expected that these policy actions will:
reinforce the cumulative impact of past actions on demand;
maintain the credibility of the commitment of monetary policy to controlling inflation, thereby keeping medium-term inflation expectations anchored; and
reinforce the point that in the absence of complementary policy responses on both demand and supply sides, stronger monetary policy actions are required.
65. Going forward, the monetary policy stance will depend on the evolving inflation trajectory, which, in turn, will be determined by trends in domestic growth and global commodity prices. A change in stance will be motivated by signs of a sustainable downturn in inflation.
Mid-Quarter Review of Monetary Policy
66. The next mid-quarter review of Monetary Policy for 2011-12 will be announced through a press release on Friday, September 16, 2011.
Second Quarter Review of Monetary Policy 2011-12
67. The Second Quarter Review of Monetary Policy for 2011-12, including developmental and regulatory policies, is scheduled on Tuesday, October 25, 2011.
First Quarter Review of Monetary Policy 2011-2012... click here
Highlights of 1st Quarter Review of Monetary Policy 2011-2012... click here
RBI CREDIT AND MONETARY POLICIES (1999-2012)... click here