Mid-term Review of
Monetary and Credit Policy for the year 2003-04
· Improved macroeconomic environment with positive outlook on both the domestic and external fronts.
· Gains from lower inflationary expectations in the recent years need to be consolidated and reinforced.
· Improved investment climate to help in revival of investment demand.
· Financial market sentiments stronger, but there is need for monitoring and providing for unforeseen contingencies.
· Health of the financial sector continues to improve despite concerns with regard to a segment of financial institutions.
· Signs of pick-up in non-food credit since August 2003.
· Need to nurture conducive credit culture among financial intermediaries, corporates and households.
· Credible actions required to address rigidity in lending rates and to improve quality of financial services.
· Virtual elimination of binding forex constraints imparts strength to the economic management and accords comfort to the conduct of public policy.