Tuesday, August 5, 2014

#RBI’s bi-monthly monetary policy statement is "Cautious But Positive"

RBI Governor Raghuram Rajan in his third bi-monthly monetary policy statement for 2014-15 said there are upside risks to inflation in view of uncertain monsoon and its impact on food production as also volatile international oil prices."It is appropriate to continue maintaining a vigilant monetary policy stance as in June, while leaving the policy rate unchanged," he added.
Reaction to the RBI Monetary Policy from Real Estate Sector

Following are the highlights of RBI’s bi-monthly monetary policy statement:

* Short-term lending (repo) rate unchanged at 8%

* Cash reserve ratio (CRR) unchanged at 4%

* SLR cut by 0.50% to 22% to unlock banking funds

* Estimates GDP growth at 5.5% for current fiscal

* Targets 8% CPI inflation by January 2015, 6% by Jan 2016

* Lowers banks’ SLR holdings in held-to-maturity category by 0.5% to 24%

* Govt policies to improve domestic demand, supply conditions

* Higher oil prices, pass-through of administered price increases pose upside risks to inflation

* Monsoons still a concern, posing risks to inflation

* Govt action on food management and fast-tracking project completion to improve supply

* Banking sector reforms will continue

* Next bi-monthly policy statement on September 30.