Topic: Highlights of RBI’s Q2 monetary policy review Details: Following are the highlights of the RBI’s second quarter review of monetary policy 2013-14: * Repo or short-term lending rate up by 0.25 per cent to 7.75 per cent. * Cash reserve ratio unchanged at 4 per cent. * Marginal standing facility (MSF) rate cut by 0.25 per cent to 8.75 per cent. * Difference between repo and MSF rate narrows to 1 per cent. * Repo hiked due to upturn of inflation, other factors. * Wholesale inflation expected to be higher than current levels; warrants ‘appropriate policy response’. * Retail inflation to hover around 9 per cent. * Food price pressures may ease with the arrival of summer crop harvest and seasonal moderation. * Prospect of delay in taper of US Fed Reserve’s bond purchases has brought calm to financial markets. * Normalcy will be restored in the forex market only when OMCs fully return to the market for their demand. * FY14 GDP growth estimate revised downward to 5 per cent vs. 5.7 per cent. * Growth likely to pick up in second half on good show in exports and agriculture. * Liquidity pressures building on small businesses as large entities holding on payments; remedies lie in speeding-up of Government and PSU payments. * Average drawdown from MSF has declined to Rs 0.4 trillion by mid-Oct, down from a high of Rs 1.4 trillion in mid-Sep * Final guidelines on unhedged forex exposures by corporates to be out by December
Posted on: Thu, 28 Nov 2013 13:35:45 +0000
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