npavan78
16-06-2008, 09:32 PM
KEY MEASURES
Hiked CRR by 25 bps to 8.25% w.e.f. May 24, 2008 keeping in mind the evolving liquidity situation.
Key policy rates viz. Bank rate, Reverse repo and Repo rates kept unchanged.
INFLATION
Inflationary pressures amplified from high food, oil prices.
Attempt to bring inflation down to around 5.5% in FY09.
Target of 4.0-4.5% inflation, going forward.
Medium-term target of inflation at 3% remains.
MONETARY AGGREGATES
Money supply growth (@ 21.2% yoy as on April 11, 2008) remains high vs projections
Aims to contain money supply growth at 16.5-17.0% in FY09.
Aims deposit growth of 17% in FY09 (presently 23% yoy as on Apr 11, 2008)
Targets credit growth of 20% in FY09 (presently 24.3% yoy as on Apr 11, 2008)
LIQUIDITY
Unwinding of LAF, MSS to impact liquidity in the period ahead.
GROWTH
Targets GDP growth of 8.0-8.5% in FY09.
Uncertainties to Indian economy appear less vs global economy.
Sees only moderation, not slowdown, in India economy
Volatile global markets may impact India's trade, flows, and asset prices.
Domestic activity not immune to global developments.
EXTERNAL
High food, oil prices to pressurize external sector.
Capital flows to continue financing external needs in FY09.
Net capital flows Apr-Dec 2007 2.7 times vs a year ago.
BANKING
Need for more transparency on off-balance sheet items and valuations of structured credit products.
To allow RRBs to sell loan assets over 60% lending target in priority sector.
Allow Tier II urban coop banks to give home loan up to Rs. 50 lakh vs Rs. 25 lakh
To set up group on issues of credit delivery, credit pricing, credit culture.
Reiterates all banks to migrate to Basel II by Mar 2009.
Banks must use chosen credit rating agencies.
GOVERNMENT BONDS
Floating Rate Bonds (FRB) issuance will take into account market conditions.
Ways & Mean advances (WMA) limit to be fixed on half-yearly basis.
WMA limit fixed at Rs. 20,000cr in H1 FY09 and Rs. 6,000cr in H2 FY09.
State-wise WMA limit unchanged at Rs. 9,925cr.
Proposes to launch Separately Traded Registered Interest and Principal of Securities (STRIPS) in gilts by end FY09.
COMMODITY & FOREX MARKETS
To put in place clearing settlement for OTC Rupee Interest Rate derivatives.
Framework on currency futures to be finalised by May 2008.
To allow domestic crude oil refining companies to hedge commodity risk on underlying contracts up to 50% of previous year’s imports.
Hiked CRR by 25 bps to 8.25% w.e.f. May 24, 2008 keeping in mind the evolving liquidity situation.
Key policy rates viz. Bank rate, Reverse repo and Repo rates kept unchanged.
INFLATION
Inflationary pressures amplified from high food, oil prices.
Attempt to bring inflation down to around 5.5% in FY09.
Target of 4.0-4.5% inflation, going forward.
Medium-term target of inflation at 3% remains.
MONETARY AGGREGATES
Money supply growth (@ 21.2% yoy as on April 11, 2008) remains high vs projections
Aims to contain money supply growth at 16.5-17.0% in FY09.
Aims deposit growth of 17% in FY09 (presently 23% yoy as on Apr 11, 2008)
Targets credit growth of 20% in FY09 (presently 24.3% yoy as on Apr 11, 2008)
LIQUIDITY
Unwinding of LAF, MSS to impact liquidity in the period ahead.
GROWTH
Targets GDP growth of 8.0-8.5% in FY09.
Uncertainties to Indian economy appear less vs global economy.
Sees only moderation, not slowdown, in India economy
Volatile global markets may impact India's trade, flows, and asset prices.
Domestic activity not immune to global developments.
EXTERNAL
High food, oil prices to pressurize external sector.
Capital flows to continue financing external needs in FY09.
Net capital flows Apr-Dec 2007 2.7 times vs a year ago.
BANKING
Need for more transparency on off-balance sheet items and valuations of structured credit products.
To allow RRBs to sell loan assets over 60% lending target in priority sector.
Allow Tier II urban coop banks to give home loan up to Rs. 50 lakh vs Rs. 25 lakh
To set up group on issues of credit delivery, credit pricing, credit culture.
Reiterates all banks to migrate to Basel II by Mar 2009.
Banks must use chosen credit rating agencies.
GOVERNMENT BONDS
Floating Rate Bonds (FRB) issuance will take into account market conditions.
Ways & Mean advances (WMA) limit to be fixed on half-yearly basis.
WMA limit fixed at Rs. 20,000cr in H1 FY09 and Rs. 6,000cr in H2 FY09.
State-wise WMA limit unchanged at Rs. 9,925cr.
Proposes to launch Separately Traded Registered Interest and Principal of Securities (STRIPS) in gilts by end FY09.
COMMODITY & FOREX MARKETS
To put in place clearing settlement for OTC Rupee Interest Rate derivatives.
Framework on currency futures to be finalised by May 2008.
To allow domestic crude oil refining companies to hedge commodity risk on underlying contracts up to 50% of previous year’s imports.