The following are the highlights of the Monetary Policy Statement for 2011-12 by the Reserve Bank of India (RBI) Governor, Mr D. Subbarao:
Short term lending rate (repo) hiked by 50 bps to 7.25 per cent.
Short-term borrowing rate (reverse repo) up by 50 basis points to 6.25 per cent.
Cash reserve ratio and bank rate left unchanged at 6 per cent each.
Interest rates on savings bank deposits hiked to 4 per cent pc from 3.5 per cent.
Economic growth projected lower at 8 per cent for FY’12.
WPI inflation projection lowered to 6 per cent.
Objective is to contain inflation by curbing demand-side pressures.
Favours aligning of fuel prices with international crude prices to avert widening of fiscal deficit.
Banks to get a new overnight borrowing window under Marginal Standing Facility at 8.25 per cent.
Likelihood of oil prices moderating significantly is low.
Malegam Committee recommendations on MFI sector broadly accepted.
Bank loan to MFIs on or after April 1, 2011, will be treated as priority sector loans.