Is Monetary Policy of India Growth Oriented

Is Monetary Policy of India Growth Oriented

  • Submitted By: Jimishms
  • Date Submitted: 10/28/2008 6:21 AM
  • Category: Business
  • Words: 778
  • Page: 4
  • Views: 1

Assignment

Is Monetary Policy of India Growth Oriented










Macroeconomics







Is Monetary Policy of India Growth Oriented


Highlights of Monetary developments of 2007-08:

• Reserve money increased by 30.9 per cent (Rs.2,19,326 crore) vs 23.7 per cent (Rs.1,35,935 crore) in the previous year
• Aggregate deposits of SCBs increased by 22.2 per cent (Rs.5,80,208crore) vs 23.8 per cent (Rs.5,02,885 crore)in the previous year
• The total flow of funds from SCBs to the commercial sector, including non-SLR investments, increased by 21.9 per cent (Rs.4,31,256 crore) vs 27.3 per cent (Rs.4,22,363 crore) in the previous year
• Commercial banks' investment in Government and other approved securities increased by 22.9 per cent (Rs.1,81,222 crore) significantly higher than 10.3 per cent (Rs.74,062 crore) in 2006-07
• The upsurge in inflation in India has occurred at a time when global commodity prices have been volatile at historically elevated levels and central banks in mature and emerging economies alike have been articulating heightened inflation concerns
• There are concerns that demand pressures, which have been reasonably contained so far, are being coupled with supply-side factors which, if not temporary, could impact domestic inflation significantly

Highlights of the Current Monetary Policy 2008-09:

• Bank Rate kept unchanged at 6.0 per cent
• Reverse Repo Rate and Repo Rate kept unchanged at 6.00 per cent and 7.75 per cent, respectively
• Cash reserve ratio (CRR) of scheduled banks increased to 8.25% with effect from the fortnight beginning May 24, 2008
• GDP growth projection for 2008-09 in the range of 8.0- 8.5 per cent.
• Inflation to be brought down to around 5.5 per cent in 2008-09
• M3 expansion to be moderated in the range of 16.5-17.0%
• Deposits projected to increase by around 17.0 per cent or Rs.5, 50,000 crore during 2008-09
• Introduction of...

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