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Annual Monetary Policy Statement 2013-14
Annual Monetary Policy Statement 2013-14
Contents: 1. Monetary Policy Objectives 2. State of the Economy: Global and Domestic 3. Outlook and Projections 3. Risk Factors 5. The Policy Stance 6. Monetary Measures 7. Market Reactions
Domestic Economy
GDP growth of only 4.5%in Q3 of 2012-13. Cumulative GDP growth for the period April Dec 2012 declined to 5% from 6.6% a year ago o Due to : - Protracted weakness in industrial activity aggravated by supply bottlenecks -Slow down in the services sector reflecting weak external demand
Liquidity Management
Liquidity remained under pressure throughout the year RBI Lowered the CRR of SCBs cumulatively by 75 bps on three occasions and the SLR by 10 bps during the year Additionally, RBI injected liquidity to the tune of Rs 1546 billion through Open Market Operations(OMOs)
Risk Factors:
A large CAD much above the sustainable level Investment sentiment remains subdued Tightening the supply side constraints
Monetary Stance
Repo rate reduced by 25bps from 7.5% to 7.25% Reverse Repo rate stands adjusted to 6.25% Marginal Standing Facility stands adjusted to 8.25% Bank rate stands adjusted to 8.25% CRR of Scheduled Banks has been retained at 4% of their NDTLs.