Mid-term Review of
Monetary and Credit Policy for the year 2003-04
· GDP growth in 2003-04 placed at 6.5-7.0 per cent, with an upward bias, compared to 6.0 per cent projected in April.
· Inflation projected for policy purposes at 4.0-4.5 per cent, with a possible downward bias, as compared with earlier projection of 5.0-5.5 per cent.
· Money Supply (M3) growth within the projected level as envisaged in April.
· Lower increase in reserve money despite sharp increase in forex inflows.
· Total resource flow to the commercial sector around the same level as last year.
· Government borrowing of over 60 per cent of the budgeted amount completed with longer maturities and at lower cost to Government.
· Fiscal deficit as at end-September higher compared to last year.
· Reduction in interest rates in financial markets and deposits observed.
· Noticeable reduction in banks' lending rates except for corporates and housing segment yet to take place.