Third Quarter Review of Monetary Policy 2010-11
-Announced on the 25th January 2011
IV. Policy Measures
55. Current growth and inflation trends warrant persistence with the anti-inflationary monetary stance. Looking beyond 2010-11, the Reserve Bank expects domestic growth momentum to stabilise, though the GDP growth rate may decline somewhat as agriculture reverts to its trend (assuming a normal monsoon). Inflation is likely to resume its moderating trend in the first quarter of 2011-12, but several upside risks are already visible in the global environment and more may surface domestically. The monetary stance will be determined by how these factors impact the overall inflationary scenario. For the fiscal consolidation process to be credible and effective, it is important that apart from augmenting revenue, the composition and quality of expenditure improves. Any slippage in the fiscal consolidation process at this stage may render the process of inflation management even harder.
56. The frictional liquidity shortage is expected to ease as government balances adjust to the expenditure schedule. However, banks need to focus on the underlying structural cause of liquidity tightness arising out of the gap between the credit and deposit growth rates.
Mid-Quarter Review of Monetary Policy
57. The next mid-quarter review of Monetary Policy for 2010-11 will be announced through a press release on March 17, 2011.
Monetary Policy 2011-12
58. The Monetary Policy for 2011-12 will be announced on Tuesday, May 3, 2011.
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Click Here For Press Statement by Dr. D. Subbarao, Governor on Third Quarter Review
Macroeconomic and Monetary Developments: Third Quarter Review 2010-11
Highlights of Third Quarter Review of Monetary Policy 2010-11....Click Here
Mixed reactions from Banks, Economists, India Inc on RBI Third Quarter Review 2010-11 ....Click Here