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Full Text of 1st Quarter Review of Monetary Policy 2011-12 click here



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:

Repo Rate

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.

Bank Rate

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).



Expected Outcomes

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.

Guidance

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







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