RBI's Annual Monetary Policy Statement for the Year 2013-14
- 3rd May 2013
IV. Monetary Measures
41. On the basis of the current assessment and in line with policy stance outlined in Section III, the Reserve Bank announces the following policy measures.
42. It has been decided to:
• reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.5 per cent to 7.25 per cent with immediate effect.
Reverse Repo Rate
43. The reverse repo rate under the LAF, determined with a spread of 100 basis points below the repo rate, stands adjusted to 6.25 per cent with immediate effect.
Marginal Standing Facility Rate
44. The Marginal Standing Facility (MSF) rate, determined with a spread of 100 basis points above the repo rate, stands adjusted to 8.25 per cent with immediate effect.
45. The Bank Rate stands adjusted to 8.25 per cent with immediate effect.
Cash Reserve Ratio
46. The cash reserve ratio (CRR) of scheduled banks has been retained at 4.0 per cent of their net demand and time liabilities (NDTL).
47. The policy action undertaken in this review carries forward the measures put in place since January 2012 towards supporting growth in the face of gradual moderation of headline inflation. Recent monetary policy action, by itself, cannot revive growth. It needs to be supplemented by efforts towards easing the supply bottlenecks, improving governance and stepping up public investment, alongside continuing commitment to fiscal consolidation. With upside risks to inflation still significant in the near term in view of sectoral demand supply imbalances, ongoing correction in administered prices and pressures stemming from MSP increases, monetary policy cannot afford to lower its guard against the possibility of resurgence of inflation pressures. Monetary policy will also have to remain alert to the risks on account of the CAD and its financing, which could warrant a swift reversal of the policy stance. Overall, the balance of risks stemming from the Reserve Bank’s assessment of the growth-inflation dynamic yields little space for further monetary easing. The Reserve Bank will endeavour to actively manage liquidity to reinforce monetary transmission, consistent with the growth-inflation balance.
Mid-Quarter Review of Monetary Policy 2013-14
48. The next mid-quarter review of Monetary Policy for 2013-14 will be announced through a press release on Monday, June 17, 2013.
First Quarter Review of Monetary Policy 2013-14
49. The First Quarter Review of Monetary Policy for 2013-14 is scheduled on Tuesday, July 30, 2013.
...Click Here For Macro economic and Monetary Developments : 2012-13
....Click Here For RBI CREDIT AND MONETARY POLICIES (1999-2014)