RBI
today said the monetary policy in the financial year 2008-09 will focus
ensuring a monetary and interest rate environment that accords high
priority to price stability, well-anchored inflation expectations and
orderly conditions in financial markets. The policy stance at the same
time will be conducive to continuation of the growth momentum.
RBI
also said it will respond swiftly on a continuing basis to the evolving
constellation of adverse international developments and to the domestic
situation impinging on inflation expectations, financial stability and
growth momentum, with both conventional and unconventional measures, as
appropriate.
RBI further said the emphasis will be on credit
quality as well as credit delivery, in particular, for
employment-intensive sectors, while pursuing financial inclusion.
At
its quarterly monetary policy review, RBI today, 29 July 2008, raised
repo rate by 50 basis points to a seven-year high of 9% to curb
inflation, now running close to 12%, and dampen inflationary
expectations. RBI also raised the cash reserve ratio (CRR), the
proportion of funds that banks must keep on deposit with it, by 25
basis points to 9%. The central bank left its reverse repo and bank
rates unchanged.
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