In line with street expectations, the Reserve Bank of India, in its first monetary policy review of 2011, raised repo and reverse repo rates by 25 basis points to 6.5% and 5.5%, respectively.
In accordance to a CNBC-TV18 poll of bankers and economists, the cash reserve ratio (which is the percentage of their deposits that banks must keep with the RBI as cash) and statutory liquidity ratio (SLR) have been left unchanged. Thus, CRR and SLR continue to stand at 6% and 24%, respectively.
As an instant effect of the credit policy, the Nifty hit the 5800-mark but immediately half of gains wiped out after central bank's forecast about GDP growth and inflation. The central bank upped its inflation forecast to 7% from the current 5.5%. This is likely to moderate in Q1FY12, RBI says. "Policy action will contain spill over to generalised inflation." The bank also said that the GDP growth rate may decline in FY12.
In accordance to a CNBC-TV18 poll of bankers and economists, the cash reserve ratio (which is the percentage of their deposits that banks must keep with the RBI as cash) and statutory liquidity ratio (SLR) have been left unchanged. Thus, CRR and SLR continue to stand at 6% and 24%, respectively.
As an instant effect of the credit policy, the Nifty hit the 5800-mark but immediately half of gains wiped out after central bank's forecast about GDP growth and inflation. The central bank upped its inflation forecast to 7% from the current 5.5%. This is likely to moderate in Q1FY12, RBI says. "Policy action will contain spill over to generalised inflation." The bank also said that the GDP growth rate may decline in FY12.
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