In order to contain inflation and anchor inflation expectations, to support a sustainable growth path over the medium term and to continue to provide liquidity to facilitate credit availability to productive sectors of the economy, the Reserve Bank of India announces the following policy measures in the first quarter review of Monetary Policy 2012-13:
- Policy Repo Rate stays at 8.0 per cent. Consequently the Reverse Repo Rate remains at 7% and Marginal Standing Facility (MSF) rate also stands unchanged at 9%.
- The Bank Rate has been maintained at the same level of 9.0 per cent.
- The Cash Reserve Ratio (CRR) of scheduled banks has been retained at 4.75 per cent of their net demand and time liabilities (NDTL).
- Statutory Liquidity Ratio (SLR) has been reduced from 24% to 23% of net demand and time liabilities (NDTL) w.e.f. the fortnight beginning 11th August, 2012. The move is expected to release around Rs. 646 billion (Rs.64000 crore) for credit deployment into productive sectors; however, impact to be modest as Banks’ excess SLR at a multi-year high of Rs. 3.45 trillion.
- The Baseline projection for WPI inflation for March 2013 is raised from April projection of 6.5 per cent to 7.0 per cent.
- The growth projection for the current fiscal (2012-13) has been revised downwards from 7.3% to 6.5%.
- Projection for FY13 credit growth and broad money growth retained at 17% and 15%, respectively.