|Policy stance:Repo Rate cut by 50bps to 8%.
- Reverse Repo Rate stands adjusted to 7%
- Marginal Standing Facility Raise the borrowing limit of scheduled commercial banks under the marginal standing facility (MSF) from 1% to 2% of their net demand and time liabilities (NDTL). MSF rate stands adjusted to 9% (previous was 9.5%).
- Bank Rate stands adjusted to 9.0%.
Cash Reserve Ratio kept unchanged at 4.75%.
- The advance estimate of the GDP growth by Reserve Bank’s baseline projection is 7.0% for FY12.The baseline GDP growth for 2012-13 is projected at 7.3%.
- RBI statement, “Our projections suggest that the economy will revert close to its post-crisis trend growth in 2012-13, which does not leave much room for monetary policy easing without aggravating inflation risks”.
- Reserve Bank’s indicative projection for inflation for FY12 stands at 7.0%.
- The baseline projection for WPI inflation for March 2013 is placed at 6.5%.
- M3 growth for 2012-13 is projected at 15.0%, aggregate deposits of SCBs are projected to grow by 16.0% and non-food credit of SCBs is projected at 17.0%.
The next mid-quarter review of Monetary Policy for 2012-13 will be announced on Monday, June 18, 2012.
By Amandeep Goraya,Banking Analyst