Annual Monetary and Credit Policy for the year 2004-2005
Stance of Monetary Policy
1. Monetary management during 2003-04 broadly in conformity with the stance of the policy set out for the year.
2. Projected expansion of money supply (M3) at 14.0 per cent with credit growth by 16.0-16.5 per cent during 2004-05.
3. Noticeable uncertainties including geopolitical risks impacting on international oil economy reckoned while designing the stance of monetary policy. As such, the inflationary situation needs to be watched closely and there could be no room for complacency on this count.
4. The overall stance of monetary policy for 2004-05 will be: (i) provision of adequate liquidity to meet credit growth and support investment and export demand while keeping a very close watch on the movements in the price level.
(ii) Consistent with the above, while continuing with status quo, RBI to pursue an interest rate environment that is conducive to maintaining momentum of growth and, macroeconomic and price stability.