RBI third Quater Monetary Policy Review FY 14

Following are the highlights of RBI’s third quarter review of monetary policy:

*Key lending rates hiked by 0.25 per cent to 8 per cent

*Cash reserve ratio kept unchanged at 4 per cent

*Marginal Standing Facility (MSF) rate stands at 9 per cent

*GDP growth to be less than 5 pc in current fiscal

*Growth to improve to 5.5 pc in 2014-15

*Current Account Deficit to be below 2.5 per cent this fiscal

*March-end inflation could exceed 8 per cent

*Rate hike will set economy securely on disinflationary path

*Growth likely to lose momentum in Q3 of 2013-14

*Slowdown in economy getting increasingly worrisome

*Inflation is a tax that is grossly inequitable, falling hardest on the very poor

*Fiscal and monetary authorities should continue to work for macroeconomic stabilisation

*Henceforth, policy review to take place every two months.

Next review on April 1

As RBI admits that Growth Rate of the economy is declining and CAD is also coming down inflation is low, so why a hike in Policy rate? RBI is now only to check inflation or being this a election year RBI want to show a good face of Government in form of low inflation without increased growth rate


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