RBI Mid Quarter Monetary Policy - Microsec

[RAJESH DESAI]

 

Dear Sir/Madam,

 

The Reserve Bank of India (RBI), in its Mid Quarter Monetary Review has surprised the street once again by keeping the Repo Rate and Cash Reserve Ratio (CRR) unchanged. The RBI has kept Repo Rate, Reverse Repo Rate under the liquidity adjustment facility (LAF) unchanged at 8.00% and 7.00% respectively, and the Marginal Standing Facility (MSF) and Bank Rate unchanged at 9.00% each. The RBI also left the Cash Reserve Ratio (CRR) unchanged at 4.75%. However, the Reserve Bank has increased the limit of export credit refinance from 15 per cent of outstanding export credit of banks to 50 per cent, which will potentially release additionally liquidity of over ~300 billion rupee, equivalent to about 50 basis points reduction in the CRR. Moreover, the RBI has also agreed to continue with open market operations to manage the liquidity into the system. The rising inflation and depreciating rupee has increased the pressure on RBI to maintain status quo this time. Non-food manufactured products inflation remains elevated at an high level of  4.9% in May 2012.

 

Kindly find the attached detail report of “RBI Mid-Quarter Monetary Policy Review (June 2012)”.

 

 

 

Regards,

 

Team Microsec Research

 

 

 

Microsec Capital Limited

Tel: 91 33 30512100

Fax: 91 33 30512020

 

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CA. Rajesh Desai