labels: rbi, finance - general, economy - general, governance
Mid term review of the monetary policynews
25 October 2005

The Reserve Bank of India today revised upwards by 0.25 per cent, the reverse repo rate by raising it to 5.25 per cent. The benchmark bank rate remains unchanged at 6 per cent and the CRR at 5 per cent. However, the central bank feels that it would be difficult to contain inflation at the earlier estimate of 5-5.5 per cent by the end of March 2006.

RBI has also revised the economic growth projections to between 7 and 7.5 per cent. The bank said prospects for sustained growth in industrial output have improved in an environment of rising investment and export demand, strong corporate profitability and buoyant business confidence.

The bank also expects the kharif output to register an increase over the previous year's level. Moreover, the bank feels that the improvement in water storage levels over the previous year also augurs well for the outlook on rabi production.

The third quarter review of part I of the annual policy will be undertaken on January 24, 2006.

Highlights in brief :

  • RBI to ensure price stability
  • Money supply (M3) growth to be higher than 14.5 per cent
  • Deposit growth seen higher than projection
  • Non-food credit to be higher than 19 per cent
  • Total liquidity up at Rs 1,20,076 crore in October 2005
  • Govt market borrowing consistent with Budget projection
  • Forex reserves up at $143.4 billion
  • Monetary policy stance to maintain price stability

 

also see : RBI Governor announces Mid-term Review of Annual Policy Statement for the year 2005-06
Click here for detailed policy highlights

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Mid term review of the monetary policy